American Airlines seeking up to US$12 billion from aid package

American Airlines seeking up to US$12 billion from aid package

FILE PHOTO: An American Airlines airplane sits on the tarmac at LAX in Los Angeles
FILE PHOTO: An American Airlines airplane sits on the tarmac at LAX in Los Angeles, California, U.S., March 4, 2019. Picture taken March 4, 2019. REUTERS/Lucy Nicholson/File Photo

CHICAGO: American Airlines intends to apply for up to US$12 billion in government aid, ensuring no involuntary layoffs or pay cuts in the next six months, executives said in a memo to employees on Monday (Mar 30).

American is eligible for about US$6 billion in payroll grants and US$6 billion in loans under a stimulus package meant to help airlines and other businesses weather a downturn from the coronavirus.

Between the government funds and its own cash position, American will be able to fly "through even the worst of potential future scenarios," chief executive Doug Parker and President Robert Isom said in the memo.

American, with the largest number of employees of any U.S. carrier, also plans to improve the terms of voluntary unpaid leave and early retirement options for flight attendants and other employees, it said.

American had 133,700 full-time employees in 2019, about 85 per cent of whom were represented by unions. Wages and benefits are its largest operating expense, representing 34 per cent of the total.

With airlines slashing their flying schedules as the coronavirus has crushed air travel demand, their need for pilots, flight attendants, mechanics and gate agents has fallen.

Delta Air Lines said on Sunday that more than 21,000 of its employees had volunteered so far to take short-term, unpaid leaves of absence while it operates a reduced schedule.

Once demand returns, airlines say they will need trained staff ready to return to work.

Under the terms of the payroll grants, airlines cannot lay off any employees before Sep 30.

"We certainly hope and expect that by that time, the virus will be contained, Americans will be flying again and we will be back to flying a full schedule," American's executives said.

Source: Reuters

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