American Airlines CEO sees 10%-20% extra staff in July 2021, ‘hard’ to avoid furloughs

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American Airlines Group Inc (AAL.O) expects to have between 10% and 20% more workers than needed in July 2021, Chief Executive Doug Parker told employees at a town hall this week, and said that avoiding furloughs will be difficult.

FILE PHOTO: American Airlines passenger planes crowd a runway where they are parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Tulsa International Airport in Tulsa, Oklahoma, U.S. March 23, 2020. REUTERS/Nick Oxford

Weathering a sharp hit to business due to the coronavirus pandemic, American and other U.S. airlines have warned of furloughs in October, which is when government payroll aid for airlines expires, but said they were hoping to avoid them.

“It’s going to be even harder than I thought,” Parker said at an employee town hall on Wednesday, adding that “revenue is not coming back as fast as we’d like.”

A video recording of the town hall, which showed Parker wearing a protective face mask, was reviewed by Reuters.

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As of the end of last year, American had 133,700 employees, more than any other U.S. airline.

In October, American expects to have between 20% and 30% more workers than needed, Parker said, while adding that furlough decisions could revolve more around the July 2021 forecast of 10% to 20% excess workers, with potentially less pain for pilots than other employees such as flight attendants.

“It really makes zero sense to go furlough a pilot in October if you’re going to need that pilot again in July,” Parker said, noting the costly training needed to bring a pilot back from a furlough.

American’s management has shared the job numbers with unions and was working on solutions, Parker said. The number of extra flight attendants is expected to be in the higher ranger, Parker added.

Under the CARES Act that gave the U.S. aviation sector a $32 billion bailout to cover payroll, airlines cannot force any involuntary furloughs before October and have been trying to encourage employees to accept voluntary exit deals.

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Major aviation unions have asked the U.S. Congress to consider extending the payroll support package through March.

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