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

Jul 8, 2020

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Oct. 1 is going to be a tough day of reckoning for many airline employees.

United Airlines is notifying around 45% of its U.S. workforce they may be furloughed or laid off on that date, in what is expected to be only one of many large scale prunings of U.S. airline workforces due to the coronavirus pandemic.

Some 36,000 frontline employees at the Chicago-based carrier will receive Worker Adjustment and Retraining Notification (WARN) Act notices this month, United told staff in a memo on Wednesday viewed by TPG. Furloughs or layoffs would occur on or after Oct. 1, the day after employment protections under the federal government’s coronavirus aid package known as the CARES Act expire.

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United’s notices are just the beginning of what many expect to be a massive cull of airline workforces this fall. Carriers must notify staff at least 60 days before a possible forced departure under federal guidelines with more WARN Act notices expected by Aug. 1.

Cowen analyst Helane Becker estimates that more than 120,000 industry employees could lose their job as a result of the COVID-19 slowdown in air travel, effectively returning the industry to 2015 levels.

Delta Air Lines has already sent notices to 2,558 pilots, according to its pilots union. And American Airlines has warned flight attendants that it may need to let go of 7,000 to 8,000 cabin crewmembers come October.

Related: United Airlines scales back August schedule on resurgent coronavirus, travel restrictions

“Involuntary furloughs, which we worked so hard to avoid, are the last step to protect the future of the company,” a United executive told media on Wednesday. The airline has cut expenses, halting all non-essential investments and parking hundreds of jets, but it is still losing around $40 million a day leaving it with workforce cuts as a last option.

The carrier is still pushing staff to take one of several voluntary options, including early outs and reduced hours, to reduce the number of forced departures. However, to date only around 3,700 of its frontline employees and 1,300 management staff have taken early out packages.

The need for significant further staff cuts come as the recovery in air travel appears to have stalled. On July 7, United notified investors that it was rolling back plans to fly around 40% of what it flew last year in August and will instead fly about 35%. This followed a dramatic rise in new COVID-19 cases in many states across the South and West, as well as new travel restrictions in both Europe and the New York City tri-state region.

Related: State-by-state guide to coronavirus reopening

“I’m expecting the post-summer capacity cutbacks will be historic,” aviation analyst and former airline executive Robert Mann told TPG. He pointed to United’s own investor notification as evidence of this.

Both Delta and United have indicated that they may pause resuming flights through the end of the year after August. This could see both airlines flying less than half of what they flew last fall.

“With COVID and other airlines’ expansion, I’m pretty bearish on the fall,” Sun Country Airlines CEO Jude Bricker told TPG as part of the CEO chat series this week. “September is going to be rough.”

Related: Sun Country Airlines fears a ‘rough’ September as travel uptick plateaus

Most of United’s WARN notices will go to flight attendants, with 15,100 cabin crews due to receive them. Another nearly 11,100 notices will go to airport customer service and gate agents, about 5,500 to maintenance staff, 2,25o to pilots, around 1,000 to call center employees, 800 to catering staff and 222 to employees in network operations.

“The United Airlines projected furlough numbers are a gut punch, but they are also the most honest assessment we’ve seen on the state of the industry,” said Association of Flight Attendants-CWA president Sara Nelson in a statement. The union, which represents flight attendants at United, along with others is pushing for an extension of the CARES Act employment protections.

The Allied Pilots Association, which represents pilots at American, is pushing a competing proposal for the federal government to buy seats on flights in order to allow for social distancing and aid airlines.

United executives do not expect the U.S. Congress to extend CARES Act protections beyond Oct. 1 citing the November elections.

Related: American Airlines pilots union wants the government to buy middle seats

Featured image by Justin Sullivan/Getty Images.

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