Coronavirus: American Airlines to apply for $12 billion from government aid package

American Airlines coronavirus

American Airlines Holdings Inc (AAL.O) intends to apply for up to $12 billion in US government aid in order to ensure no involuntary layoffs or pay cuts in the next six months.

In a memo to its employees, chairman and CEO of American Airlines Group Inc. Doug Parker and president Robert Isom wrote:

“As we continue to adjust to our new near-term reality, we want to update you on American‘s plans as it relates to the CARES Act, and inform you of some significant enhancements to our voluntary leave and early retirement programs.

“The CARES Act provides for up to $50 billion of funds for commercial aviation, of which approximately $12 billion is allocated to American Airlines.

“These funds are being distributed to ensure continuation of essential airline service and protect jobs. 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.

“Importantly to our team members, these funds include payroll assistance that ensures no involuntary furloughs or cuts in pay rates or benefits for the next six months.

“We certainly hope and expect that by that time, the virus will be contained, Americans will be flying again and we will be back to flying a full schedule. American fought hard for this legislation on behalf of our airline and our team members.

“While we are confident American and our team will now fly through this storm, there is no doubt we will have more team members than we need to fly our dramatically reduced flight schedules over the next several months.

“This provides us the opportunity to offer enhanced voluntary leave and early retirement options to our team. The primary change we made today is that we are now including a partial salary component to both the leave and early out offers.

“We are pleased to offer these programs to those who may be interested and encourage you to take a look. Full details, including specifics on eligibility, are on Jetnet. The deadline to apply is Friday, April 3, at 11:59 p.m. CT. If you already opted into one of these programs, you will now receive these enhanced benefits.”

They added: “American will emerge from this temporary downturn ready to fly and stronger than ever. Each of us has a role to play, and taking care of people on life’s journey has never been more important.

“We are incredibly proud of the way all of you are leaning into this effort. Our work is designed with the goal of maintaining safe, efficient air travel, and being ready to step up when America and the world are ready to move again.

“That is our commitment to each of you, and our collective commitment as American Airlines to our customers and our country.”

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