United Airlines Holdings Inc notified 36,000 employees, or 45% of its US workforce, that their jobs are at risk after federal payroll aid expires at the end of September.
The final layoff tally hasn’t been finalised and may be smaller as workers weigh offers to leave voluntarily, United told employees. The planned furloughs include about 15,000 flight attendants, 11,000 customer service staff and 5,500 maintenance employees. About 3,700 workers have already taken voluntary separation packages.
United’s warning signals the depth of potential job losses at US airlines later this year, even after the federal government provided $25 billion in payroll support plus another $25 billion available in loans. The carrier told employees that state quarantines prompted by a jump in coronavirus infections were jeopardising a nascent US travel recovery. United expects that travel demand will remain weak until a treatment or vaccine is widely available.
“We are living through the most disruptive financial crisis in the history of commercial aviation,” the company said in a letter to employees. “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.”
The shares were little changed at $32.53 at the close in New York. United has tumbled 63% this year, the biggest drop on a Standard & Poor’s index of major carriers.
In a regulatory filing, United said it expected to book charges of about $300 million in the second quarter to cover costs of voluntary employee separations. That will include a cash portion of about $50 million.
Workers represented by union contracts will be furloughed based on their seniority, while management employees will
be culled based on their performance and job-specific needs, United executives said. Those who are cut will be given the option to return to their jobs whenever travel demand returns and additional labour is needed.
The proposed furloughs are “a gut punch” for United flight attendants “but they are also the most honest assessment we’ve seen on the state of the industry,” said Sara Nelson, president of the Association of Flight Attendants-CWA, which represents 25,000 employees at the airline.
“This crisis dwarfs all others in aviation history and there’s no end in sight,” she said in a statement.