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American Airlines “Squandering Cash” After it Gave Too Many Pilots Paid Early Retirement

American Airlines “Squandering Cash” After it Gave Too Many Pilots Paid Early Retirement

A spokesperson for the union that represents pilots at American Airlines has accused the carrier of “squandering cash” after management admitted it had given too many flight crew nearing retirement the opportunity of a paid “early out”. Dennis Tajer, a spokesperson for the Allied Pilots Association and also a pilot at the Dallas Fort Worth-based airline said he was “stunned by the lack of execution” in a special leave of absence scheme brought in to save money because of the Coronavirus crisis.

A couple of weeks ago, American introduced a range of voluntary leave options for its pilots that had been negotiated with the Allied Pilots Association. As American has greatly drawn down its flying programme in response to the COVID-19 outbreak, the leave of absence options was a way to temporarily reduce the number of surplus pilots without the need to furlough crew or rely on government bailouts.

American offered three types of leave to its 14,000 pilots:

  1. Voluntary extended leave of absence – Up to 12-months of unpaid leave but maintaining benefits and continuing to accrue seniority and annual leave
  2. Voluntary short term leave of absence – Of between one, three or six months and paid the equivalent of 55 flying hours per month, as well as maintaining benefits and continuing to accrue seniority and annual leave
  3. Voluntary early out – Allowing pilots who are at least 62-years old to leave the airline early and get paid the equivalent of 55 flying hours per month up to the mandatory retirement age of 65.

But it now appears that American has granted the option of a paid early out to too many of pilots, meaning that colleagues who wanted to take a shorter period of paid time off or even save the company even more money by going on unpaid leave won’t now be able to.

“The crisis brought on by the COVID-19 pandemic has brought uncertainty, for both our personal well-being and the financial health of the airline,” explained Kimball Stone, American’s SVP for flight operations in an internal memo sent to pilots this week.

“Over the past few days, we have added to the stress and uncertainty in finalizing the Voluntary Leave of Absence awards. I apologize for that and offer no excuses,” the memo continued.

Around 600 pilots who operate American’s short-haul fleet of Airbus A320 family and Boeing 737 aircraft have been given voluntary early outs. But after granting these paid early retirements, Stone said the airline “either by miscalculation or miscommunication wrongly indicated that we could accommodate a minimum of 1,200 A320 and B737 short term leaves.”

“…we discovered that we could offer nowhere near that number of leaves based upon the current April schedule,” the memo continued.

Not all is lost, however. Stone says he hopes more voluntary leaves will be granted in May… in fact, if flying continues to be hit by the COVID-19 pandemic like it has in March and April, it’s pretty much a near certainty that American will be in a position to offer more leave within a month.

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