United Airlines could furlough 36,000 employees, or roughly 45 per cent of its workforce, by October 1 amid a drop in air travel resulting from the coronavirus pandemic.
The fall deadline marks when a restriction against enacting furloughs and layoffs in a $5 billion payroll bailout of the airline expires.
Officials at United made the announcement Wednesday nearly three months before the deadline to give staff enough time to think about how the possible furloughs will affect their careers with the carrier.
‘None of the decisions we’ve made so far have been more difficult than the decision we are announcing today,’ a United official said during a press call.
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United Airlines could furlough 36,000 employees, or roughly 45 per cent of its workforce, by October 1 amid a drop in air travel resulting from the coronavirus pandemic. The carrier’s jets are seen at Newark Liberty Airport just outside New York City
A masked United worker is pictured behind a plastic barrier at Newark Liberty Airport. The air carrier may have to let workers go by October 1 after a restriction against furloughs and layoffs in a $5 billion payroll bailout of the airline expires
United, according to another official on the call, is ‘burning $40 million every day’, Fox Business reports.
Shares in the airline ended at $32.53 Wednesday after dropping about 7 per cent on the initial news of the possible furlough a day earlier.
United was among major US carriers, including American, Delta and Southwest, which received $25 billion in payroll bailouts under a $2.2 federal stimulus package deal meant to protect workers during the pandemic.
Airline workers had hailed the federal bailout deal as a way to preserve jobs in the crisis for almost a million impacted employees.
The airlines say they are hopeful that US demand, which initially dropped by 95 per cent due to coronavirus travel restrictions and state mandated lockdowns, will begin to recover by October.
Some, however, have warned that the slowdown in air travel could extend into next year and even longer, requiring another round of government bailouts to survive.
United, in the meantime, has been offering voluntary programs helping employees consider retirement or other jobs outside the industry. Tens of thousands of United workers already have taken voluntary unpaid leave, according to the airline.
The airline already has cut executive salaries, cancelled non-urgent projects, and put non-essential hiring on hold to ensure ‘involuntary furloughs would be a last resort.’
Shares in the airline ended at $32.53 Wednesday after dropping about 7 per cent on the initial news of the possible furlough a day earlier
One of the United officials said that the majority of employees who may still get furloughed will be able to return to their jobs as demand returns.
Among the United workers that may be impacted by the start of October are 11,000 employees currently working airport operations and 15,000 flight attendants.
Another 5,500 technical operations workers and 2,000 flight operations staffers also may be affected, in addition to aircraft catering, contact and network operation centers employees.
The airlines say they are hopeful that US demand, which initially dropped by 95 per cent due to coronavirus travel restrictions and state mandated lockdowns, will begin to recover by October. United passengers are pictured at Tampa International Airport last month
A regulatory filing from the airline shows United expects ‘reduced demand to destinations experiencing increases in COVID-19 cases and/or new quarantine requirements or other restrictions on travel.’
‘We continue to offer voluntary programs and are moving forward with our management and administrative reorganization to align our payroll expenses with overall demand,’ a United spokesperson told FOX Business in a statement.
‘And we’re talking to our union partners to find creative solutions for our frontline employees, but it’s possible we may need to use furloughs or other measures’ the spokesperson explained.
‘We are closer than ever to almost a million airline workers knowing they will receive their paycheck and keep their healthcare and other benefits, at least through September,’ said Association of Flight Attendants President Sara Nelson, who is widely credited for the idea of aid specifically for payroll.
‘At the same time, we were able to rein in the worst corporate practices by tying this aid to restrictions on stock buybacks, executive compensation and dividends.’