Watch CBS News

American Airlines to cut nearly a third of management and administrative jobs

The travel industry copes with coronavirus
The travel industry copes with coronavirus 04:55

American Airlines will eliminate 30% of management and administrative jobs at the carrier as it moves to slash costs amid the impact of COVID-19 on the travel industry, according to an internal memo. The company is also offering voluntary buyouts through June 10 in a further bid to rein in expenses as it loses millions of dollars daily operating fewer flights.

Although American Airlines received federal financial assistance to help lessen the blow from the coronavirus, "we need to reduce our cost structure, including our most significant expense — the cost of compensation and benefits," Elise Eberwein, American's executive vice president of people and global engagement, said in an email to employees. "And we must plan for operating a smaller airline for the foreseeable future."

Airlines step up safety measures during coronavirus 04:31

The government in April offered a $25 billion bailout to the nation's biggest airlines, including American, Delta, Southwest, United and other carriers, in an effort to curb job losses. But with travel demand down as much as 90% following the coronavirus, airlines are moving to chop their payrolls. 

United said earlier this month that it plans to cut management and administrative jobs by at least 30%. Foreign carriers are also seeking to shrink. British discount airline EasyJet said Thursday it expects to reduce its 15,000-strong workforce by up to a third. And aviation giant Boeing announced this week that it will pare its headcount by 12,000 through a combination of layoffs and buyouts.

American in April reported a staggering $2.2 billion loss in the first quarter, around the time when the coronavirus pandemic triggered a sharp drop in air travel. The airline's revenue fell 19% while costs continued to rise even as the virus spread. 

"Never before has our airline, or our industry, faced such a significant challenge," the carrier's chairman and chief executive, Doug Parker, said at the time.

—With reporting by CBS News' Kris Van Cleave and the Associated Press

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.