American Airlines to Cut 30% of Management and Administrative Staff


American airlines announcing that they are cutting thirty percent of their management and administrative staff and that would end up being about five thousand of the seventeen thousand management and support workers that they currently employs about five thousand job cuts currently coming from American here I was trying to figure out how this is working jacket so I know they're offering buyouts year so basically voluntary voluntary layoffs the bailout provisions that took said no layoffs furloughs reductions in pay allowed in till the end of September so would this be a decision that this is an offer for a buyout and then saying look if we don't get enough of these buyouts come October one we're doing layoffs that's what it looks like this is from the Wall Street journal it says that they will make force cuts if there aren't enough the decision will be announced in July employees that take these cuts were are forced out will still remain on the payroll through September thirtieth so it gets here's the thing that I come back to on this we all remember how it felt back in March when you know there were questions about what the heck the economy was going to look look there's still a question but they were in a really deep questions about what what are these companies gonna do are they going to survive in the best that we could do for workers after backstopping these companies to allow them to continue to operate and definitely the best we could do for workers to say Hey we're gonna give you just a temper thirtieth and what is American coming out and saying that they're going to do yup we're gonna fiery on October first so I'm with you Chuck but if the demand isn't there isn't this a cheaper option than putting the person on planet it is a I mean is this a better option I I know you can't I mean I I guess what do you do instead of this I mean you can't create demand for the airline industry Hey there there have to be cut down there I'm I'm not saying that there shouldn't be caught Sam I'm saying that we should have given twenty five billion dollars to the airlines okay for like how many times of airlines gone through bankruptcies in the last twenty years right like every major U. S. delta went through it twice in a three year period American did United did like you go down the list every major U. S. airline pretty much aside from southwest has gone through bankruptcies in the last twenty years and it doesn't mean that they stop operating it doesn't mean that they're permanently out of business it means that the people that invested in those companies get wiped clean and investors have to come in with the promise saying Hey maybe it's gonna be different this time maybe I can make an airline profitable and they never really are okay so my my point is Hey if we're going to give twenty five billion dollars to an industry that is dealt with bankruptcy successfully in the past anyways and come out on the other side of them still operating what are we really doing here other than bailing out shareholders who I don't think really deserve to get bailed out Hey I'm with you on that truck I guess my counter argument would be that these airlines are competing directly with effectively state owned and subsidized businesses of other countries yeah you take a look at you know airlines in China and Singapore in yeah parts of Europe yeah those are airlines that are also notched real public entities and so if you determine that this is an integral part of our site you know I agree you know busier lines have gone through bankruptcies and they've come back out on the other side but is there a concern that they won't be able to because of the competition from state owned entities here's why I'll say no on that if you look at American Airlines revenue in this is according to Forbes from November of twenty nineteen so for about six months ago yeah out of Americans forty billion in passenger revenues by twenty nine point six billion of that was domestics about seventy five percent as domestic revenue if you look at how airline routes are handled as far as where airlines are allowed to fly on international travel in general when we talk about domestic travel international carriers carriers that aren't based in the country where the trip is both originating and finishing typically are prohibited from offering those routes that's why you don't see British Airways flying from New York to Los Angeles right they're typically not allowed to so internationally those are the rules of the road when it comes to how we allow airlines to operate now you can have certain situations where those are waived the most common one is what are known as fifth freedom routes where effectively let's say the British Airways is flying from one day in to Boston and then they have a connecting flight down to the Caribbean or something like that that's flight from Boston to the Caribbean would be known as that fifth freedom route because it's flying not from the country of origin one the U. K. but instead from a second country to a third one but it's originating still in the original country so when I talk about you know Hey is international competition gonna put American Airlines are dealt out of business internationally obviously there's all kinds of competition there when you're talking about routes to you know the Middle East and Europe and places like that but international carriers can't compete domestically because the laws don't allow them to yeah that's that's a fair view point I guess my big question would be okay we build these guys out October one there in late bunch people off if air travel hasn't returned or we're gonna be facing the same question again on November one and what's gonna be the answer I'm gonna bail out again yeah it in that's the question is where does it end and and that's why again the company an airline going bankrupt doesn't mean that they stopped flying it does mean that they need to find financing and get rid of all their old debt and this and that but it doesn't mean they stopped flying in it I just if it bothers me a little bit that we gave this money to airlines in there doing exactly what they said they were going to do they're going to lay these people off and they're going to try to maximize shareholder return on the back of U. S. taxpayer dollars it's a very real and very fair concern and you know to come back to a common theme here we are furthering that divergence between the you know lower class individual and the the person who has investments in

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