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American Airlines details severance packages for high-level workers

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Yahoo Finance’s Sibile Marcellus joins Heidi Chung to discuss the latest outlook for American Airlines amid the coronavirus.

Video Transcript

HEIDI CHUNG: I want to talk now about the airlines, which have also been beaten down as a result of the global pandemic. Major airlines have also been looking to reduce their headcount, as they look to preserve cash during this extremely challenging time. American Airlines out with some new details on severance packages for its high-level employees. We have Yahoo Finance's Sibile Marcellus here with the details. Sibile?

SIBILE MARCELLUS: Although these airlines, many of them accepted a $25 billion bailout, it does restrict them in the sense that they are not allowed to implement layoffs through September 30th. What we've seen in the meantime is that they've put pressure on their employees, encouraging them to take buyouts. They've been trying to reduce their headcounts because they say they're facing strong reduction in demand.

And the latest airline to do this is American Airlines. They have revealed new details about the severance packages they will be offering to their high-level employees once September 30th expires and they are allowed to lay off employees. And here are some details about that severance package that they'll be offering. It includes about nine months of pay and a little bit more than two years of health care coverage. Now, this comes as passenger traffic has plunged 94% and airlines are losing 350 million to 400 million a day.

HEIDI CHUNG: All right, Sibile, thank you so much for that breakdown.