American Airlines moves ahead with 19,000 furloughs, but will recall workers if aid deal reached

American Airlines will move ahead with plans to furlough 19,000 workers on Thursday after talks for a national coronavirus aid package failed in Washington, but the airline is prepared to reverse course if a deal is reached, its CEO Doug Parker said.

The terms of $25 billion in federal payroll support Congress passed for the ailing sector in March prohibit airlines from cutting jobs until Oct. 1. The aid was meant to help airlines cope with a sharp drop in bookings until there was a significant recovery in demand, which hasn’t materialized.

Airlines spend the last several months urging lawmakers for another $25 billion, a proposal that has won bipartisan support. However, talks for a broad coronavirus package that would include another round of airline aid faltered on Wednesday, opening the door to more than 30,000 job cuts, starting Thursday, the lion’s share of them at American and United Airlines.

While House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a deal earlier Wednesday but talks are set to continue.

Parker said in an employee note that he spoke with Mnuchin late Wednesday and told him that if further talks yield a deal, American would “reverse” the furloughs and recall any workers. It was not immediately clear how long that offer would stand. 

“I am extremely sorry we have reached this outcome,” Parker wrote. “It is not what you all deserve. It is a privilege to advocate on behalf of the hardworking aviation professionals at American and throughout the industry, and you have my assurance that we will continue to do so in the days ahead.”