U.S. airlines seeks to avoid staff lay-offs

The top three U.S. airlines, hit hard by the coronavirus pandemic, are rolling out fresh programs to induce tens of thousands of employees to accept voluntary leave or early retirement in the hope of avoiding widespread furloughs in the fall, company memos show.

Around 100,000 employees of American Airlines Group Inc, Delta Air Lines Inc and United Airlines Holdings Inc have already accepted offers for temporary or permanent leaves, memos show.

But airlines must continue reducing their workforces to match their businesses to a sharp downfall in air travel due to the coronavirus pandemic.

Delta, with around 91,000 employees, is to announce on Thursday details of an enhanced retirement package for long-term employees and a separate voluntary opt-out package. Both include cash severance, full healthcare coverage and travel benefits, a memo dated May 27 showed.

“Every voluntary departure helps to protect the jobs of those who most need them,” CEO Ed Bastian said in the memo to employees. He added: “I can’t emphasize enough how challenging the environment is, and will be for the foreseeable future.”

U.S. airlines cannot force any job or pay rate cuts until Oct. 1 under the terms of the federal CARES Act, which provides billions of dollars to help cover their payroll expenses until Sept. 30.

After that date, airlines have warned of involuntary reductions if overall workforces are still larger than needed.

American Airlines, with more than 100,000 employees, told its management and support staff on Wednesday that it must cut about 30% of their ranks, the same size of reductions planned by United for its management and administrative employees.

Both American and United are also discussing voluntary options with unions representing frontline employees, including pilots and flight attendants.

Delta is also in talks with its pilots union on early retirement options.