American Airlines announced today that it would begin issuing Worker Adjustment and Retraining Notification (WARN) notices to 25,000 employees. This comes as government support for the industry will run out on September 30th with no clear appetite for the second round of industry support.
Issuing WARN notices
In a July 15th letter to employees viewed by Simple Flying, American announced that it was beginning to issue WARN notices to unions and represented team members in some states. American will send these notices as it plans on being overstaffed by about 20,000 employees.
The WARN notices are federally mandated requirements that give employees notice about potential furloughs. Alongside this, American is offering employees additional extended leaves or early out programs– usually, some of the better offers the airline will provide amidst the current crisis.
Who are getting WARN notices?
The 25,000 notices will be divided up to the following workgroups:
- 2,500 pilots (18% of the workgroup)
- 9,950 flight attendants (27% of the workgroup)
- 3,200 maintenance & related personnel (22% of the workgroup)
- 4,500 fleet service personnel (26% of the workforce)
- 2,900 passenger service personnel (30% of the workforce)
- 1,000 in the reservations team (23% of the workforce)
- 175 in dispatch (36% of the workforce)
- 50 flight crew training instructors and simulator pilot instructors (15% of the workgroup)
- 10 flight simulator engineers (7% of the workforce)workgroup
Just because American is sending 25,000 WARN notices does not mean that all 25,000 employees will see a guaranteed furlough. Before then, the airline will be working with its unions to reduce furloughs by offering extended leaves and early-outs. In addition, the travel demand situation may change so that the airline would need to furlough fewer than those numbers.
Earlier this year, CEO Doug Parker has stressed the need for the airline to go into the fall ready for next summer. While American has tried to avoid the “old airline playbook” on furloughs, the airline will likely have to resort to those measures in this unprecedented crisis.
While pilots are seeing some furloughs, these employees are expensive to train and sometimes difficult to find. This is why Doug Parker has emphasized that needing a pilot in June next year means keeping them through the fall. Most of those WARN notices heading off to pilots are likely because the airline decided to retire aircraft like the 757s, 767s, A330s, and E190s. Other retirements will also likely follow given reduced demand. In addition, some aircraft like the A330-200s will be parked for a long time.
Options for employees
American has worked with unions to give frontline represented workgroups two options: extended leave or early-out. The extended leave program would see employees take 15, 18, or 24 months of leave with continued medical coverage, non-rev travel privileges, and partial pay for some employees.
The early-out program is for employees with at least ten years of occupational security. It includes up to $150,000 in a “Retiree Health Reimbursement Arrangement” for 65-point plan retirement-eligible team members. There will also be some positive space travel.
For employees with less than ten years of occupational security, there will be an early-out program with continued medical coverage and non-rev travel privileges for a specific period of time. Further details would be available for affected individuals.
Pilots are excluded from the aforementioned options due to mandatory retirement age and required training cycles across aircraft. Pilots should anticipate a separate leave and early-out program.