American Air to Furlough 17,500 Staff as Travel Demand Slumps

'Today is the hardest message we have had to share so far - the announcement of involuntary staffing reductions,' American tells employees.
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American Airlines  (AAL) - Get Report shares fell Tuesday after the carrier said it would furlough 17,500 union workers in October, thanks to the travel meltdown caused by the coronavirus pandemic.

American shares recently traded at $13.02, down 3.2%. The stock has fallen 55% this year.

That reduction comes in addition to 1,500 administrative and support workers laid off in August but continuing to get paid through Oct. 1. That’s when the government’s payroll protection aid to the airline industry ends.

The close of the six-month payroll protection program is responsible for the move, American Chief Executive Doug Parker and President Robert Isom wrote in a letter to employees, cited by The Dallas Morning News. “The coming weeks and months will be some of the most difficult we have ever faced,” they said.

“Today is the hardest message we have had to share so far - the announcement of involuntary staffing reductions effective Oct. 1. So, as Sept. 30 approaches, we have announced reductions in service, including the complete elimination of service to certain markets in early October, and today we are announcing the related reductions in our workforce.”

American said last week that it was eliminating service to 15 small cities in October, when a federal requirement to serve those airports ends. The affected cities include Sioux City, Iowa; New Haven, Conn.; and Springfield, Ill.

The furloughs unveiled Tuesday include 8,100 flight attendants and 1,600 pilots, The Dallas Morning News reported. The furloughs will come from American and its regional carriers Envoy, PSA and Piedmont.

Another 23,000 American workers have accepted voluntary leaves and buyouts.