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American Airlines warns employees it could furlough thousands by April


American Airlines Inc. on Wednesday warned some 13,000 U.S. employees that they could be furloughed within the subsequent few weeks because the pandemic continues to crimp journey and authorities cash runs out.

In a letter to employees, American Airlines
AAL,
+6.09%

additionally criticized the pace of the COVID-19 vaccine distribution and mentioned it expects the dearth of demand to proceed into the summer time.

Any job impression will take impact on or after April 1, when authorities payroll help expires, the airline mentioned within the letter Wednesday.

Nearly 5 weeks into 2021 “we find ourselves in a situation similar to much of 2020,” Chief Executive Doug Parker and President Robert Isom informed employees.

With the extension of the Payroll Support Program late final yr the corporate “fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team. Regrettably, that is no longer the case,” they mentioned.

“The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand,” they mentioned.

American is flying at the very least 45% much less within the first quarter than the primary quarter of 2019, and based mostly on the present outlook it gained’t fly all of its plane in the summertime as deliberate, it mentioned.

The furlough notices, required by legislation in sure areas, will exit on Friday, the corporate mentioned. They “do not necessarily equate to furloughs,” It mentioned. The firm will work with union leaders “to do everything we can to mitigate job impact as much as possible,” it mentioned.

Unions are urging Congress to increase the help via Sept. 30 and the corporate will help that effort, it mentioned.

American may also open an early-retirement program, with some incentives relying on years of service, and a leave-of-absence program, it mentioned.

Shares of American Airlines have fallen 35% up to now 12 months, contrasting with features round 18% for the S&P 500 index
SPX,
+0.10%
.

Source Link – www.marketwatch.com

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