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One-Third of American Airlines Pilots and Flight Attendants Are Taking Leave or Early Retirement

By Lou Whiteman - Apr 13, 2020 at 9:22AM

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American seems certain to come out of this crisis a much smaller airline.

American Airlines Group (AAL -0.80%) has cut about 80% of its flights and grounded planes in response to the COVID-19 pandemic-induced travel slowdown. While the company has not yet resorted to layoffs as it manages through the crisis, it will have a significantly smaller headcount in the months to come.

American has granted voluntary leave to 4,800 pilots for April or May, while another 715 will take an early retirement package including some pay and benefits, according to the Dallas Morning News. About 7,960 flight attendants are taking either leave or early retirements, with leave packages ranging from three to 12 months.

The airline had about 13,800 pilots and 25,300 flight attendants heading into the crisis.

An American tail lit up at night.

Image source: American Airlines

Airlines have been hard hit by the pandemic, which has caused travel demand to evaporate overnight. The companies hope to receive federal funding, which would allow them to avoid layoffs during the downturn, but no amount of assistance will be enough if traffic does not return in the months to come.

American, which is seeking $12 billion in government aid, seems to be telegraphing that it expects a slow recovery. The industry headed into 2020 grappling with a potential pilot shortage, in part because of federal guidelines that require pilots to retire at 65. Three months ago, airlines were lobbying to get that restriction eased. Now they are offering early retirements.

In a letter discussing the early retirements, the airline called the sudden nature of the departures "a bit unsettling as this wasn't what any of us had planned."

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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