Publicly traded carrier American Airlines has reportedly planned to cut 5,000 management and support staff positions as the coronavirus (Covid-19) pandemic continues to affect business.
In a memo seen by CNBC, the airline is offering buyouts to these employees. Flight attendants and other frontline staff may also be offered new voluntary leave and buyouts next month.
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The carrier had 130,000 employees as of the end of last year. Around 39,000 are currently on voluntary leaves or early retirement.
American people and global engagement executive vice-president Elise Eberwein was quoted by CNBC as saying: “Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits.”
“There is no doubt this is going to be a painful time for all, especially for our departing colleagues, who have given American Airlines their all and are leaving through no fault of their own.
“Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner.”
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By GlobalDataIn March, American Airlines decided to reduce the number of international flights from the US by 75%, in response to ongoing travel restrictions and a drop in flight demand due to the outbreak.
