American Airlines Says Oct 1 Job Losses Will Total 40,000

American Airlines has become the first major airline to fully quantify the impact of the coronavirus crisis on its workforce, saying that 40,000 people could be gone this fall.

That means a 28% reduction from the March 1 employment level of 140,000.

Of the 40,000 departures, 19,000 will come in the form of involuntary furloughs or separations on Oct. 1, the day after the expiration of funding under the CARES Act that was approved by Congress in March.

“As you all know, the Payroll Support Program (PSP) of the CARES Act protected our team against involuntary separations through Sept. 30,” wrote American CEO Doug Parker, in a letter to employees on Tuesday. “It also ensured that we and other airlines continued to serve each of the markets we flew prior to the crisis.

“It was an incredibly effective piece of legislation,” Parker said. “The only problem with the legislation is that when it was enacted in March, it was assumed that by Sept. 30, the virus would be under control and demand for air travel would have returned.

Instead, U.S. airlines now fly about 30% of the passengers they flew on similar days in 2019.

“Based on current demand levels, we at American now plan to fly less than 50% of our airline in the fourth quarter, with long-haul international particularly reduced to only 25% of 2019 levels,” Parker said.

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