American Airlines to warn pilots this week about potential furloughs

American Airlines is planning to warn pilots this week about potential furloughs, the latest carrier to prepare employees for job cuts as the coronavirus pandemic roils the airline business.

The terms of $25 billion in federal coronavirus aid prohibit carriers from laying off workers or cutting their pay rates through Sept. 30, but weak demand has forced airlines to shrink to cut costs.

The Worker Adjustment and Retraining Notification Act requires employers to notify staff about possible layoffs or temporary furloughs generally 60 days in advance and it is not guaranteed that employees who receive these warnings will be laid off.

American has some 15,000 pilots and has already offered early retirement packages under an agreement with the Allied Pilots Association, their union.

“Our expectation is that WARN notices will be sent next week,” said Chip Long, American’s managing director of flight line operations, in a July 10 audio message, which was heard by CNBC.  “Again, our hope is to very soon engage with APA and seriously explore every opportunity to take care of our pilots while taking care of our airline.”

The exact numbers of pilots who would receive the notices wasn’t immediately clear. American didn’t comment. Delta, for its part, has warned more than 2,500 pilots about potential furloughs, while United has told more than 2,200 of its pilots.

Fort Worth, Texas-based American earlier this month said it is overstaffed by about 20,000 people for its reduced fall schedule. That includes up to 8,000 flight attendants. Other work groups in addition to pilots are likely to receive WARN notices.

Airlines executives are urging employees to take buyouts and early retirement packages, but they have also warned they would have to turn to furloughs and job cuts if there aren’t enough volunteers.

United last week told close to 36,000 employees ⁠— nearly 40% of its workforce ⁠— that they could be furloughed.