American Airlines will use coronavirus funds to save jobs, but workers may get less pay
Many of the roughly 33,000 North Texans who work at American Airlines are likely to see significant reductions in their paychecks, even though the Fort Worth-based company is slated to receive $12 billion in federal stimulus funds.
In a letter to employees Monday, the airline’s chief executive officer, Doug Parker, reiterated that the airline intended to use the estimated $12 billion to ensure that no workers lost their jobs through Sept. 30. About half of the money would come in the form of loans, and the rest in grants to ensure the airline can pay workers without layoffs.
“These funds are being distributed to ensure continuation of essential airline service and protect jobs,” stated the letter, which was signed by Parker and company president Robert Isom. “We intend to apply for these funds and are confident that, along with our relatively high available cash position, they will allow us to fly through even the worst of potential future scenarios.”
But despite those assurances, many employees could see take home pay reductions of 20% or more, mainly as a result of the airline’s dramatic reduction in flights, one airline union official said.
Nearly all international flights and 60% of domestic flights have been suspended for this month — with an expected reduction to 80% of domestic flights in May. The reduction was necessary because of government restrictions on some routes, and an evaporation of customer demand for travel, as people stay home to avoid contracting coronavirus.
On Wednesday unions representing flight attendants at American, Delta Air Lines, United and Dallas-based Southwest came out in opposition of the agreement approved by Congress and signed by President Trump, which allows the federal government to take an equity stake in airlines that accept the money.
That issue aside, other unions representing most of the Fort Worth-based airline’s workers came out in favor of federal assistance. Those labor leaders are also realistic about the short-term effects of flying during a time of the COVID-19 pandemic.
Dennis Tajer, a Chicago-based American Airlines 737 captain and spokesman for the Allied Pilots Association, said his organization’s collective bargaining agreement with the airline guarantees pilots a minimum amount of hours of flight time — for example, 73 hours per month for some reserve pilots.
But with so many flights suspended for the foreseeable future, a pilot that recently has been earning about 90 hours per month of duty time may now get 74 hours, leading to a loss of roughly 18% of pay.
“When you take a 20% salary cut, that cuts to the bone,” Tajer said in an interview.
Most of the company’s employees are represented by labor unions, and their contracts are collectively bargained.
Flight attendants also have contracts with minimum hourly guarantees.
Mechanics, fleet service and other workers represented by TWU-IAM recently ratified a new contract with American after four years of tense negotiations. That $4.2 billion contract provides workers with raises of 5.5 to 16.1%. Union officials could not be reached to comment on how the coronavirus crisis could affect implementation of the new agreement, and airlines officials declined to elaborate.
Less certain is how the non-union employees will be affected.
Many of the 9,160 administrative and support staff members who work at American’s Fort Worth headquarters are non-union. So far, there have been no publicly disclosed plans to reduce administrative and support staff hours.
The company is still reviewing the Treasury Department’s latest guidance about the federal stimulus, American spokeswoman Stacy Day said in an email.
