UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 3, 2021
(Exact name of registrant as specified in its charter)
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code:
(817 ) 963-1234
(817 ) 963-1234
N/A | ||||||||
| (Former name or former address if changed since last report.) | ||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.05. | COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES. | ||||
On February 3, 2021, American Airlines, Inc. (“American”), a wholly owned subsidiary of American Airlines Group Inc. (the “Company”), informed its employees that on February 5, 2021, it will begin to send Worker Adjustment and Retraining Notification (“WARN”) notices to approximately 13,000 U.S.-based employees. These WARN notices, which may be required by law in advance of potential furloughs in certain locations, are part of American’s response to the impacts of the COVID-19 pandemic on its business. As of the date hereof and based on current facts, American expects that any job impact will take effect on or after April 1, 2021.
At this time, the Company is unable to make a good faith determination of an estimate or range of estimates required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to workforce reduction actions in the remainder of 2021. The Company will file an amendment to this report or provide an update in a Quarterly Report on Form 10-Q after it makes a determination of such estimate or range of estimates, if any.
| ITEM 7.01. | REGULATION FD DISCLOSURE. | ||||
As discussed above, on February 3, 2021, American distributed a letter to employees regarding the possibility of a workforce reduction at certain locations. This internal communication is furnished herewith as Exhibit 99.1 and is incorporated by reference into this Item 7.01.
The information in Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. | ||||
| (d) Exhibits. | ||||||||
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104.1 | Cover page interactive data file (embedded within the Inline XBRL document). | |||||||
Cautionary Statement Regarding Forward-Looking Statements
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act, the Exchange Act, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the Company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the Company’s other filings with the Securities and Exchange Commission. There may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the Company in particular have been material, are changing rapidly, and cannot be predicted. The Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines Group Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN AIRLINES GROUP INC. | |||||||||||
| Date: February 3, 2021 | By: | /s/ Derek J. Kerr | |||||||||
| Derek J. Kerr | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN AIRLINES, INC. | |||||||||||
| Date: February 3, 2021 | By: | /s/ Derek J. Kerr | |||||||||
| Derek J. Kerr | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
Exhibit 99.1
Special Jetwire – Feb. 3, 2021
Fellow team members,
We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020. As we closed out last year with the successful extension of the Payroll Support Program (PSP), we fully believed that we would be looking at a summer schedule where we’d fly all of our airplanes and need the full strength of our team. Regrettably, that is no longer the case. The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand.
We will fly at least 45% less in the first quarter compared to what we flew for the same period in 2019, and based on current demand outlook, we will not fly all of our aircraft this summer as planned. Consequently, like last fall, we will have more team members than the schedule requires after federal payroll support expires April 1.
On Friday, we will begin issuing Worker Adjustment and Retraining Notification (WARN) notices covering approximately 13,000 team members. As a reminder, WARN notices may be required by law in advance of potential furloughs in certain locations, but it’s important to note that these notices do not necessarily equate to furloughs.
Of course, this is not where we want to be, and we will work with union leadership to do everything we can to mitigate job impact as much as possible.
First, you may have seen that our union partners are urging Congress for an extension of the PSP through Sept. 30 of this year. We are fully behind our union leaders’ efforts to fight for an extension and we will lend our time and energy to support this effort in every way we can. Our nation’s leaders understand the vital role airline workers play in keeping the country moving. They showed their support last year and we will encourage them to do the same again as the pandemic continues around the world.
Secondly, on Friday we will open a voluntary early out program (VEOP) and a long-term voluntary leave of absence (VLOA) program for frontline, U.S.-based team members, excluding pilots. The benefits offered through these programs have not changed from last summer, but given where we are in our recovery, these programs may make more sense for some of our team members today than they did previously.
Here’s a high-level overview of the programs, and you can find full details on Jetnet. The application window will open on Friday morning.
•Early out program for team members with 10 or more years of workgroup seniority: An early out offering for team members with at least 10 years of workgroup seniority. This program includes up to $150,000 in a Retiree Health Reimbursement Arrangement for 65-point plan retirement-eligible team members, as well as some positive space travel.
•Early out program for team members with less than 10 years of workgroup seniority: An early out offering for team members who have less than 10 years of workgroup seniority. This program will provide continuation of active medical coverage and non-rev travel privileges for a period of time.
•Extended leave program: Extended leaves of 12 or 18 months that provide continued medical coverage at active rates, continued non-rev travel privileges and partial pay.
Obviously, issuing these required WARN notices isn’t a step we want to take. Tens of thousands of our colleagues have faced extreme uncertainty about their job security over the past 12 months, and that’s on top of the emotional stress all of our team has faced during an incredibly difficult year.
Please know that we will get through this period and to more stable ground — that is certain. And, we will continue to fight in every way possible to get there as soon as we can. Until demand returns and we can provide permanent job stability, we owe you transparency. That is what we can offer today and what we will continue to provide. Thank you for all you continue to do for each other, our customers and our airline.
Doug/Robert
WARN notices by workgroup
Workgroup | WARN notices | ||||
Pilots | 1,850 | ||||
Flight Attendants | 4,245 | ||||
Maintenance & Related | 1,420 | ||||
Fleet Service | 3,145 | ||||
Passenger Service | 1,205 | ||||
Dispatch | 100 | ||||
Flight Crew Training Instructors and Simulator Pilot Instructors | 40 | ||||