American Airlines outlines severance packages for high-level employees

American Airlines has recently detailed severance packages for high-level employees if they are laid off when the terms of federal aid expire in the fall, people familiar with the matter said. The severance packages for upper management include around nine months of pay and a little over two years of health-care coverage for at least some of the employees at the director level and above, one of the people said. The packages come as American and other airlines are preparing to shrink and offer employees voluntary separation options as the coronavirus pandemic continues to hurt demand. The virus and measures to stop it have pushed airlines including Delta, United and American to their first quarterly losses in years. The terms of $25b in federal coronavirus relief set aside for US airline payroll prohibit carriers that accepted the aid from laying off or cutting the pay rates of employees through Sept. 30. Airline executives have warned they expect they will have to shrink to compensate for weak travel demand. The high-level employees, a group that recently took pay cuts, and might receive the severance packages if they are involuntarily cut, could face more difficulty finding work at their level than other employees, said Tom McMullen, senior client partner at organizational consulting firm Korn Ferry. Severance packages “tend to ramp up for executives,” McMullen said. “Executives don’t find a new job in a month. They might find a job in a year.” He added it will likely be challenging for laid off airline employees compared with those in a single ailing company because the “sector is fighting for its life.”<br/>