United Airlines plans to furlough up to 36,000 workers, or just under half of its US workforce, as it contends with a pandemic that has decimated demand for air travel.
The Chicago-based company on Wednesday said it would send furlough warning notices to 15,100 flight attendants, 11,000 in airport operations and 2,250 pilots. Other affected employees include catering, aeroplane mechanics, flight network operators and call centre customer service representatives.
Not everyone who received a notice would be furloughed, United said. The company and unions representing pilots and flight attendants are attempting to increase participation in voluntary leave and early retirement programmes. The airline expects to take a $300m charge in the second quarter related to voluntary employee terminations, according to a Securities and Exchange Commission filing.
“Our primary goal throughout this crisis has been to ensure United — and the jobs it supports — are here when customers are flying again,” the company said.
The Association of Flight Attendants-CWA, which represents United’s flight attendants, said the airline’s “projected furlough numbers are a gut punch, but they are also the most honest assessment we’ve seen on the state of the industry”.
The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed
Passenger numbers at airlines worldwide plummeted this spring as governments imposed stay-at-home orders to curb the spread of Covid-19. Airlines slashed capacity but continued to burn tens of millions of dollars in daily expenses.
The potential furloughs at United will not take effect until October 1. The US government passed a $2tn aid package in March that included $50bn for the airline industry. Airline executives agreed when they took the public funds that they would not lay off employees or cut their pay until September 30.
United is receiving $5bn from the portion of the funds from the package meant to guarantee payrolls, and plans to take an additional $4.5bn in low-interest loans.
United is not the first US airline to announce potential job cuts. American Airlines said last week that in the autumn it would have 20,000 more front-line workers than it needs to operate.
United said July capacity was down 75 per cent compared with the same month in 2019. Scheduled capacity for August is 65 per cent of last year’s.
“And now, given the recent resurgence of Covid-19 cases across the country, it’s increasingly likely that travel demand will not return to normal until there is a widely available treatment or vaccine,” the company said. “The reality is that United simply cannot continue at our current payroll level past October 1 in an environment where travel demand is so depressed.”
Captain Todd Insler, chairman of the master executive council for the union representing 13,000 of United’s pilots, said in message to members that it was “corporate triage”.
“None of the pilots notified today of their anticipated furlough are in this situation because of any action or decision on their part. With different luck, timing or circumstances, it could be any one of us,” he said.