American warns 13,000 employees of furloughs as airlines prepare to lose federal aid next month

American Airlines on Wednesday said it will send furlough notices this week to about 13,000 employees as a second round of federal payroll aid is set to expire and travel demand remains in tatters.

Rival United Airlines last Friday sent similar furlough warnings to 14,000 staff members.

The latest $15 billion Congress approved for U.S. carriers late last year required airlines to recall the employees they furloughed in the fall and maintain payroll through March 31. It was the second round of Covid aid for the industry; Congress gave airlines $25 billion last March to keep them from cutting employees through the fall.

Fresh from reporting record annual losses of $34 billion, U.S. airline CEOs last month warned they didn’t expect a strong rebound in air travel in the near future.

Employers are legally required to give staff notice about possible layoffs or temporary furloughs generally 60 days in advance. The notices do not guarantee that recipients will ultimately lose their jobs.

American’s CEO Doug Parker told staff last week that the carrier is still overstaffed for current demand projections and that there could be furloughs.

“I don’t want anybody to be surprised if the company issues WARN notices in the near future,” Parker said in a town hall with staff last week, audio of which was reviewed by CNBC. He said the company will work with labor unions to reduce furloughs through voluntary measures.

Airline labor unions are now seeking $15 billion more in federal payroll support for the industry to keep jobs through Sept. 30.