In keeping with federal law, many US airlines have sent letters to their employees warning them of potential layoffs in the fall. The advisory notices sent by those airlines to their workers aren’t definitive, meaning they aren’t notification of an actual layoff. However, they’re a strong signal that airlines may have only one option for saving precious cash after federal subsidies and grants expire at the end of September.
Layoffs May be Inevitable
US airlines, which have been receiving federal aid to help them deal with a huge drop in ticket-buying customers due to the coronavirus, are likely to send up to half their workers home beginning October 1st. The federal CARES Act, which is the mechanism through which domestic air carriers had been receiving aid, is set to end its aid provisions for airlines on that date.
American Airlines, for example announced back on July 15th that it might have to lay off 25,000 of its employees to deal with the economic fallout caused by COVID-19 as well as the end of federal aid. Such workers include pilots, flight attendants, mechanics, and ground handling staff. The carrier had already announced its intention to trim its management ranks by as much as 30%. Perhaps in anticipation of things to come, the airline also announced the other day that it’s planning to furlough 378 of its workers at San Francisco International Airport, where it employs 1,200 people.
Other Major Carriers
In addition to American, pretty much every other major US legacy carrier has announced a combination of potential fall layoffs as well as programs seeking workers willing to take early retirement or a buyout. Delta Air Lines recently wrapped up an early exit offering which saw 17,000 of its employees agree to voluntarily leave the company and the story’s similar at the other big carriers.
Small Airlines Also Hit
Smaller US airlines such as Frontier and Spirit have also sent out notices warning of potential furloughs and layoffs to come in the fall. Up to 35% of Frontier Airlines pilots and flight attendants could face furlough during the first two weeks of October, HR executives at the carrier recently announced to employees. What’s worse is that furloughs could range from at least six months all the way up to permanent layoff with no hope of being called back to work.
Spirit Airlines, another smaller carrier, also warned its pilots and flight attendants that it plans to furlough anywhere from 20% to 30% of its workforce in October when CARES Act funding ends. With 8,900 total employees, nearly 2,700 flight attendants and pilots at Spirit will confront potential furlough. Smaller air carriers such as Frontier and Spirit generally tend to use vendor companies to handle ground handling operations, with those firms adjusting their own staffing as their client airlines grow or shrink operations. This is one reason why layoffs and furloughs at smaller non-legacy airlines tend to hit their airborne employee groups harder, as they constitute the bulk of workers at those carriers.
With mergers and consolidations the norm in the 2000s and 2010s, major US air carriers saw their employee numbers grow greatly. As of the end of 2019, American Airlines employed nearly 134,000 people. United Airlines, with 95,000 total employees, had already announced that potential layoff warnings were sent out to 45% of its workforce, with an additional 1,300 management and support staff to be laid off come October 1st. United’s warning amounts to around 36,000 possible layoffs that month.
Delta Air Lines
With up to 20% of its 90,000-person workforce agreeing to early retirements or buyouts, Delta Air Lines, alone among the nation’s major legacy air carriers, may be able to avoid furloughs and layoffs in the fall. The company’s CEO, Ed Bastian, spoke about the situation and said his airline has a ‘real shot’ at ducking furloughs due to the number of workers that decided to take the company’s buyout or early retirement offerings. Delta’s ability to avoid furloughs is one of the few potential bright spots in what could potentially be a seriously tough fall travel season for the nation’s airlines.
Kelly Hoggan, Founder and CEO of H4 Solutions, previously served as assistant administrator for operations at the Transportation Security Administration. In that role, he was responsible for aircraft and checkpoint security operations at the nation's 450-plus commercial airports.