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United Airlines may furlough a third of its pilots as air travel recovery stalls amid COVID resurgence

July 30, 2020
4 min read
United Airlines may furlough a third of its pilots as air travel recovery stalls amid COVID resurgence
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The outlook is bleak at United Airlines as many travelers opting again to stay home amid the resurgence of the coronavirus pandemic across much of the U.S.

The Chicago-based carrier may need to furlough up to a third of its pilots, or roughly 3,900, due to the worsening outlook, United senior vice president for flight operations Bryan Quigley told pilots in an internal message on Thursday viewed by TPG. The airline previously warned just 2,250 pilots of possible furloughs.

"In recent weeks, bookings have stalled and we continue to see an impact of the recent increase in COVID-19 cases on our business," he told staff. "Because COVID-19 cases continue, and demand improvement remains very slow, we may need to furlough more pilots in 2020, and in 2021, than originally planned."

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The move comes a week after United CEO Scott Kirby said the airline expects the recovery in air travel to plateau at around half of 2019 levels until there is a vaccine for the coronavirus. He added that they do not expect a widely available vaccine until around the end of next year.

In effect, United could be roughly the size of Air Canada was last year — an airline about half its size — for the foreseeable future, according to Cirium schedule data for 2019.

United is not alone. American Airlines, Delta Air Lines, JetBlue Airways and Spirit Airlines have all warned staff of likely furloughs this year once employment protections under the federal government's coronavirus aid package, or CARES Act, expire on Sept. 30. Southwest Airlines has said it can avoid furloughs until 2021.

Related: United Airlines may furlough up to 36,000 staff as coronavirus forces drastic cuts

Among the airlines warning of staff downsizing, Spirit is perhaps the most surprising. The airline's low-cost ethos and primarily budget-minded leisure travelers are exactly the demographic that have resumed flying since the worst of the pandemic in April.

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However, even holidaygoers are no longer returning the skies in significant numbers, leading Spirit CEO Ted Christie to warn on July 28 that the budget carrier could furlough between 20% and 30% of frontline staff.

Data from trade group Airlines for America (A4A) shows that net passenger bookings — new reservations minus cancellations — has held steady at down around 80% year-over-year since the beginning of July.

Related: United Airlines worries travel recovery will stall until there’s a COVID vaccine

American and United are backing a push by labor unions to extend CARES Act employee protections through March 2021. An extension could temporarily protect the jobs of tens of thousands of airline staff as carriers get a better handle on the trajectory of the recovery and their costs.

"There are really only two ways to mitigate the full impact of furloughs. The first is another stimulus bill," said Quigley. The other are new agreements with unions that reduce expenses.

In addition, United has extended the deadline for staff to take early departure packages into August, according to a separate memo from the airline's executive vice president of human resources and labor Kate Gebo viewed by TPG.

Airlines can reduce the number of furloughs and layoffs as more staff take voluntary packages.

Related: United is latest to back union-led effort to extend coronavirus employment protections

Featured image by Getty Images

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Why We Chose It

It's hard to find a card that competes with the mile-long list of benefits that come with the Amex Business Platinum. While it's certainly not the card for the average consumer, a business owner with tons of expenses -- especially related to travel -- will find this card incredibly valuable. This card is similar to the consumer version that Amex offers, but with more business-oriented perks around statement credits and earning rates that are a better fit for business owners.

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  • Extended warranty protection
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  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in annual statement credits on a curation of business purchases, including select purchases made with Dell Technologies, Indeed, Adobe, and U.S. wireless service providers.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year for checked baggage fees, lounge day passes, and more at one selected airline.
  • $189 CLEAR® Credit: Use your Card and get up to $189 back per year on your CLEAR® membership. CLEAR® is available at more than 50 U.S. airports and stadiums.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.