American Airlines is Offering Employees Voluntary Separation Options
American Airlines has laid out plans for severance packages for upper management amid the coronavirus outbreak and its impact on air travel. The airline is preparing for layoffs in September when federal aid expires.
The severance packages include around nine months of pay and about two years of health-care coverage for at least some of the employees.
American Airlines is also offering employees voluntary separation options. Nearly 39,000 team members have elected to take a voluntary leave or early retirement, American Airlines said. Among those are 4,500 early retirements. With less planes flying in the near future, management and support staff team need is about 30% less.
If there are not enough early volunteers, American Airlines will have to take the difficult step of involuntary separations. Those decisions will be communicated in July, though impacted team members will remain on payroll through Sept. 30, 2020, and will receive full pay and benefits through the expiration of the CARES Act Payroll Support Program.
The terms of $25 billion in funds that were given to airlines as part of the federal coronavirus relief program, prohibit carriers that accepted the aid from laying off or cutting the pay rates of employees through September 30. Most airlines have have said they expect they will have to shrink their workforce after that, since air travel if far from getting back to normal.
“The high-level employees, a group that recently took pay cuts, and might receive the severance packages if they are involuntarily cut, could face more difficulty finding work at their level than other employees,” a CNBC article notes.
Chase Sapphire Preferred® Card
Chase Sapphire Preferred® Card is the old king of travel rewards cards. Right now
bonus_miles_full
Learn more about this card and its features!
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
