American Airlines is making major announcements as it plans to address the October 7 expiration date of federal assistance through the CARES Act.
On August 20, the airline confirmed it will suspend service to 15 cities across the U.S. Just a few days later, the announcement came that 19,000 American Airline employees will be furloughed by October 1.
These dramatic changes signify the true magnitude of the impact of COVID-19 on the airline and travel industry.
Suspending Service to 15 Cities
The CARES Act provided billions of dollars in payroll assistance for airlines, but with strings attached. American Airlines and other carriers could only accept the payroll assistance by agreeing to maintain service throughout its existing route network, even if many of those flights carried few or no passengers.
Now that the CARES Act stipulations are set to expire, American Airlines plans to cut costs by trimming 15 cities from its roster. Most are smaller, secondary cities served by American Eagle, an American regional carrier.
On August 7, the list of cities losing service from American Airlines includes:
- Florence, South Carolina
- Greenville, North Carolina
- Del Rio, Texas
- Dubuque, Iowa
- Huntington, West Virginia
- Joplin, Missouri
- Kalamazoo, Michigan
- Lake Charles, Louisiana
- New Haven, Connecticut
- Roswell, New Mexico
- Sioux City, Iowa
- Springfield, Illinois
- Stillwater, Oklahoma
- Williamsport, Pennsylvania
A number of those cities, including Stillwater, Williamsport, New Haven, Roswell, Joplin, Greenille, Florence, Dubuque, and Del Rio will be left with no air service at all by any passenger carrier once American Airlines enforces its route suspension. Others, like Kalamazoo and Lake Charles, will lose about a third of their routes and cities served.
According to a statement from American Airlines, the route suspensions are currently scheduled from October 7 to November 3, but it’s always possible that the suspensions will be extended if demand is slow to recover.
Cutting 19,000 Employees in October
At the same time that American Airlines is suspending service to and from 15 cities, it also plans to furlough 19,000 of its 140,000 employees from their employment.
The federal aid protecting those jobs will expire in early October, leaving American Airlines without the support it needs to continue paying so many employees. The CARES Act prohibited airlines receiving federal aid from laying off workers through September 30. Demand for air travel has only modestly recovered since the pandemic began, making it nearly impossible for American Airlines to maintain its full workforce.
“We have come to you many times throughout the pandemic, often with sobering updates on a world none of us could have imagined,” wrote American Airlines CEO Doug Parker and its president, Robert Isom, in a staff note announcing the cuts. “Today is the hardest message we have had to share so far – the announcement of involuntary staffing reductions effective Oct. 1.”
The 19,000 people impacted include 17,500 flight attendants, pilots, and mechanics, as well as 1,500 administration and management employees. According to American Airline executives and other airline leaders, the extension of federal aid offers the only possibility of avoiding furloughs and service reductions.