United Airlines to furlough over 16,000 employees in October
The Trump administration is eyeing an executive action to prevent airline furloughs
United Airlines said in an internal memo that it plans to furlough 16,370 employees in October, becoming the latest U.S. carrier to announce massive layoffs as the coronavirus pandemic continues to batter the travel industry.
That includes up to 2,850 pilots, 6,920 flight attendants and 2,010 technicians. Other workers that will be affected by the layoffs are the catering team (320); contact center employees (430); management and administrative team (1,400); and network operations center employees (180).
Under the terms of a $25 billion bailout fund that was created earlier this year as part of the CARES Act, airlines are prohibited from cutting jobs or reducing workers' pay through Sept. 30. United received $5 billion through the program.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HOLDINGS INC. | 54.02 | +0.08 | +0.15% |
Airlines are required to inform employees of mass layoffs 60 to 90 days ahead of time.
Over the summer, United sent layoff warnings to 36,000 employees, nearly half of its U.S. staff, but whittled the number down by offering early retirement packages, voluntary leave and reduced hours programs.
Including international employees, United has a total workforce of roughly 95,000.
WHITE HOUSE LOOKING AT EXECUTIVE ACTION TO HALT AIRLINE FURLOUGHS, LAYOFFS: MEADOWS
Air travel plunged 95% between March and mid-April, when the COVID-19 crisis brought the nation's economy to a grinding halt. It's started a tepid recovery since then, but remains well below pre-pandemic levels.
"The pandemic has drawn us in deeper and lasted longer than almost any expert predicted, and in an environment where travel demand is so depressed, United cannot continue with staffing levels that significantly exceed the schedule we fly," the memo to employees said. "Sadly, we don’t expect demand to return to anything resembling normal until there is a widely available treatment or vaccine."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAL | AMERICAN AIRLINES GROUP INC. | 14.22 | -0.31 | -2.13% |
| DAL | DELTA AIR LINES INC. | 49.24 | +0.22 | +0.45% |
The Trump administration is eyeing an executive action to prevent airline furloughs as Congress remains deadlocked over another coronavirus relief package.
American Airlines has said it would furlough or lay off about 19,000 workers starting in October, while Delta Air Lines said it plans to furlough about 2,000 pilots effective Oct. 1.
AMERICAN AIRLINES TO FURLOUGH 19,000 WORKERS
“We’ve got four executive actions that actually the president took, we’re going to take a few others," White House chief of staff Mark Meadows said last week. "Because if Congress is not going to work, this president is going to get to work and solve some problems. So hopefully we can help out the airlines and keep some of those employees from being furloughed.”