American Airlines reportedly plans 5,000 job cuts

Publicly traded carrier American Airlines has reportedly planned to cut 5,000 management and support staff positions as the coronavirus (Covid-19) pandemic continues to affect business.

In a memo seen by CNBC, the airline is offering buyouts to these employees. Flight attendants and other frontline staff may also be offered new voluntary leave and buyouts next month.

The carrier had 130,000 employees as of the end of last year. Around 39,000 are currently on voluntary leaves or early retirement.

American people and global engagement executive vice-president Elise Eberwein was quoted by CNBC as saying: “Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the cash we’ve raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits.”

“There is no doubt this is going to be a painful time for all, especially for our departing colleagues, who have given American Airlines their all and are leaving through no fault of their own.

“Additionally, running a smaller airline means we will need a management and support staff team that is roughly 30% leaner.”

In March, American Airlines decided to reduce the number of international flights from the US by 75%, in response to ongoing travel restrictions and a drop in flight demand due to the outbreak.