American Airlines is notifying 25,000 workers of possible layoffs — almost 20% of the company

• American Airlines said on Wednesday that it will warn 25,000 frontline workers of impending layoffs or furloughs, including 9,950 flight attendants and 2,500 pilots.
• The airline said it had hoped travel demand would recover by the time CARES Act funding ends on October 1. American Airlines said it no longer expects that.
• American previously issued layoff notices to support and management workers.

American Airlines said on Wednesday that it will warn 25,000 frontline employees of possible furloughs and layoffs, nearly 20% of the company's workforce of 130,000.

Although travel demand had begun a modest rebound, airline CEO Doug Parker and president Robert Isom said in a letter to employees that demand has begun to slow down again as COVID-19 infections have spiked in numerous US states.

"From the time the CARES Act was signed in March, we had a stated goal of avoiding furloughs because we believed demand for air travel would steadily rebound by Oct. 1 as the impact of COVID-19 dissipated," Parker and Isom wrote in the letter. "That unfortunately has not been the case."

The affected employees will receive Worker Adjustment and Retraining Notification Act notices, or WARN notices, this week. American Airlines began informing management and support employees of furloughs in late June.

Not every employee who receives a WARN notice will ultimately be furloughed. American said in the letter that it has 20,000 too many employees, and hopes to reduce the number of eventual furloughs by offering buyouts, early retirements, and extended leave options.

The affected frontline employees constitute 2,500 pilots and 9,950 flight attendants — more than the 7,000 to 8,000 that the airline had previously said could be laid off.

About 3,200 maintenance workers, 4,500 fleet service employees, 2,900 passenger service agents, and 1,000 reservations specialists will also be included.

Flight attendants are the largest affected work group, with 37% of workers receiving notices.

The overall number was smaller than at United, which is issuing the notices to nearly 40% of its workforce.

Airlines like American have tried to limit involuntary layoffs by reducing their headcounts through voluntary measures like buyouts, voluntary leave, and early retirement. On Wednesday, American announced new offerings, including one aimed at more junior employees which allows for a continuation of subsidized medical benefits for up to 18 months, according to an internal document seen by Business Insider.

While airlines are prohibited from furloughing or laying off workers until October 1 under the terms of the payroll support they received from the CARES Act, most employers are required to give 60 days of notice when possible under the WARN Act.

The airline said that not every worker who received a WARN notice would be impacted and that the final number would depend on how many more employees take voluntary leave and buyout packages, as well as whether demand makes an unexpected recovery by next month.

Workers who are ultimately furloughed could end up being recalled once travel demand improves. However, the airline has said it does not expect a full recovery until there is an effective vaccine or treatment for the novel coronavirus.