American Airlines has reached a deal with its 14,000-member pilot union to give more leave and early retirement packages as it tries to avoid looming furloughs in the fall.
American is giving pilots with more than 10 years experience to take a buyout and letting others take nearly a year off without pay, or even alternate months without flying as the carrier tries to navigate tough months ahead with the COVID-19 pandemic still devastating the industry.
American Airlines has also recently extended the deadline for other union employees to decide on taking voluntary leave with reduced pay or to retire early. The deadline was July 31, but the company is now giving until August 12.
"Since the beginning of this pandemic, we have expressed a goal to avoid involuntary furloughs," said a letter from Kimball Stone, American's senior vice president of flight operations. "As COVID-19 continued to impact our industry, however, it became clear that despite our efforts and progress with existing voluntary programs, we still had many more people than necessary to run our operation and we needed to do more to arrest cash burn."
American sent more than 28,000 furlough notices to unions representing mainline and regional employees in July. Leaders have said that not everyone who received a notice will be placed on furlough, but that the company is also 20,000 employees overstaffed based on forecasts for fall.
Government stimulus funds for airlines run out on Oct. 1 and airlines are then allowed to start laying off or furloughing workers. Airline executives are forecasting flying to be down about 30% in the fall.
The Allied Pilots Association has been pleading with company management to expand or adjust some of the programs aimed at cutting down on furloughs. In particular, they have been urging the airline to allow more pilots to retire early, something other airlines have done. Until now, the company has been reluctant to do considering the fact that pilots are hard to replace and the company invests a lot in keeping training requirements up to date.
The buyout deal isn't as generous as the deal made for pilots 62 years old and over, so isn't expected to get as many volunteers, said Allied Pilots Association spokesman Dennis Tajer.
"We are trying to do our part," Tajer said. "If we can save one job, that's one more job than we had before."
This buyout deal would give pilots who take a buyout about six months pay along with $100,000 to $150,000 in a medical spending account. The deal for older pilots is about 60% of annual pay for three years.
The deal announced Tuesday for volunteer leave could also help pilots that are likely to get furloughed to get medical benefits and to maintain training requirements so they will be ready to fly sooner once the pilots are recalled from furlough.
The union and other unions are still pinning hopes on an extension of government payroll grants to put a halt to furloughs.
"This is a positive, but we are facing a negative wall of many furloughs coming forth," he said.
