25,000 employees could be furloughed, says American Airlines

With coronavirus pandemic taking a toll on the airline industry, American Airlines said on Wednesday that it is sending notices to 25,000 employees that they could be furloughed come Oct. 1.

This comes despite the airline receiving billions in government support. The $2 trillion relief package, also known as Cares Act provided more than $50 billion in the form of grants and loans for airlines to keep frontline workers on the job.

According to a report in The Washington Post, the announcement is the second this month from a major US carrier, with United Airlines notifying nearly 36,000 of its employees last week that they could be furloughed come October.

"We hate taking this step, as we know the impact it has on our hardworking team members," Doug Parker, the airline's chief executive, and Robert Isom, American's president, wrote in a letter to employees, reported Washington Post.

As per the report, in their letter, Parker and Isom said they had hoped that the government-backed relief package signed in March would allow them to avoid furloughs "because we believed demand for air travel would steadily rebound by Oct. 1 as the impact of COVID-19 dissipated. That, unfortunately, has not been the case."

Worldwide, the coronavirus cases have surpassed 13 million while the death toll has crossed half-a-million. In US, the number of coronavirus cases stands at 3,574,371 while the death toll has risen to 138,358, according to the latest data from the Johns Hopkins University.

American Airlines received $5.8 billion as part of the Payroll Support Program, and earlier this month, it signed a letter of intent with the U.S. Treasury to receive a loan of approximately $4.75 billion. But the executives noted that June revenue was 80 per cent lesser as compared to the previous year.

Though the airline is issuing 25,000 notices, it hopes to ultimately reduce the number of employees it will have to furlough by encouraging some to take early retirement, unpaid leaves or early-out programs.

According to the report, Parker and Isom said the airline supports efforts by employee unions calling on Congress to extend the Payroll Support Program through March 31.

Several countries across the world put strict restrictions on movement in order to curb the spread of coronavirus, thus severely impacting the airline industry.

( With inputs from ANI )