United Airlines might trim nearly half of U.S. employees
United Airlines said Wednesday up to 36,000 of its frontline U.S. employees, or about 45% of its domestic workforce, could lose their jobs Oct. 1.
The carrier said the affected employees will get a notice of what it called “involuntary furloughs” either from the company or a union representative. With the announcement, Chicago-based United becomes the first major U.S. airline to detail a massive downsizing because of the business decline related to the coronavirus.
The advisories are being given under the federal Worker Adjustment and Retraining Act, or WARN, which requires a 60-day notice of large-scale layoffs or furloughs. United said not everyone who gets a notice will be forced out; complying with the WARN act gives the company the right to cut the workers if it must.
“We expect to offset these numbers through increased participation in new and existing voluntary programs as well as continued discussions with our union partners about creative ways to help reduce furloughs,” the company said. “Our primary goal throughout this crisis has been to ensure United — and the jobs it supports — are here when customers are flying again.”
The international president of the flight attendants’ union, Sara Nelson, called the furlough notices a “gut punch” but said United’s estimates “are also the most honest assessment we’ve seen on the state of the industry.”
Nelson, head of the Association of Flight Attendants-CWA, and other labor leaders in the aviation industry are calling for Congress to continue into 2021 the CARES Act assistance for airlines. She said United’s projected furlough number is greater than the total workforce of most major airlines a decade ago.
After dropping by more than 90% in March and April, air travel has recovered slightly, but industry executives are worried a surge in coronavirus cases and quarantine orders at important hubs such as Chicago and the Northeast will cause demand to plunge again. Many in the industry are saying it may take at least two years for passenger traffic to return to 2019 levels.
United’s use of the term “furlough” as opposed to “layoff” implies the reductions could be treated as temporary, with plans to recall staff as demand picks up. But that depends on progress in controlling COVID-19 and whether people have the confidence again to fly in close quarters with others.
United said it expects its scheduled capacity in July to be down 75% from its level last year, and that August should be down 65%.
The airline’s breakdown of potential furloughs by work group: Airport Operations (includes customer service and gate agents), 11,082; Catering Operations, 808; Contact Centers, 983; Flight Operations (includes pilots), 2,250; Inflight Services (includes flight attendants), 15,100; Network Operations Center, 222, and Technical Operations (includes maintenance staff ), 5,457.
United said 20,000 workers have taken unpaid leave, but company losses have been so great that it has taken other steps to cut costs and bolster liquidity. It already had announced plans to cut 3,400 managers, about 30% of its total, a move that will land hard at its Chicago headquarters in Willis Tower.
Oct. 1 is the first day United can furlough staff without violating terms of the $5 billion in grants and loans under the CARES Act, which protects payrolls through Sept. 30. United also is due to receive $4.5 billion from the Treasury Department secured by warrants for its shares.
Capt. Todd Insler, chairman of the bargaining unit at United for the Air Line Pilots Association, International, said, “Furloughing employees is corporate triage with a terrible impact on thousands of United families.” He said the union will work on proposals to lower the number of furloughs.
United Airlines expects July flight capacity to be down 75% from 2019.