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Over 30,000 United Employees Receive Potential Furlough Notices

Over 30,000 United Employees Receive Potential Furlough Notices
Joe Cortez

United Airlines’ employees are bracing for a round of furloughs, after holding two town hall meetings warning about a very slow recovery. An internal memo was sent to 36,000 United front-line employees, warning they could be put on furlough starting Oct. 1, 2020.

United Airlines is warning 36,000 customer-facing employees that they could be sent on furlough, after the carrier claims any pathway to recovery will be greatly impacted. In an 8-K filing with the U.S. Securities and Exchange Commission, the airline told employees furloughs could happen by Oct. 1, 2020.

United Sends WARN Notices to Employees After Town Halls

During two town hall meetings on July 6 and 7, 2020, the airline spelled out a very depressed road to recovery in 2020. With June consolidated capacity down over 80 percent and July capacity expected to drop around 75 percent, the carrier noted they may have to take extreme actions to stay afloat.

“The Company plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand, and expects demand to remain suppressed until a widely accepted treatment and/or vaccine for COVID-19 is available,” United wrote in their 8-K filing. “Members of management noted that the Company does not expect the recovery from COVID-19 to follow a linear path, as illustrated by recent booking and demand trends, and that consolidated capacity through the end of 2020 is expected to be generally consistent with August 2020.”

United’s chart on year-over-year industry supply vs. demand. Chart courtesy: United Airlines

As a result, the airline could start dropping staff as soon as Oct. 1, 2020 – the first allowable date after accepting Payroll Support Program funds from the CARES Act. According to a leaked United memo published by CBS News, up to 36,000 employees received a memo indicating their jobs could be on the line.

 

Although employees are receiving Worker Adjustment and Retraining Act (WARN) notices, it doesn’t necessarily mean that they will be furloughed. According to slides shared in the carrier’s 8-K filing, WARN notices will be sent throughout July, with decisions made in early August. Those based in California, Illinois, New Jersey and New York will receive direct written notification from the airline, while everyone else will receive written notices through their unions.

United provided this slide to employees discussing WARN notices and a potential furlough timeline. Slide courtesy: United Airlines

Path to Recovery Rocky Based on New COVID-19 Cases

The reduced demand is directly based on new COVID-19 cases both in the United Sates and around the world. Because passengers are concerned about their health while flying, overall demand is dropping across the industry.

Slide source: United Airlines

At United’s Newark hub alone, the spread of novel Coronavirus and quarantine restrictions caused domestic net bookings to drop by 84 percent as of July 1, compared year-over-year to 2019. Out of all other hubs, bookings decreased by 73 percent compared year-over-year.

Slide Courtesy: United Airlines

“Members of management noted that the Company does not expect the recovery from COVID-19 to follow a linear path,” the airline wrote in their 8-K filing. “As illustrated by recent booking and demand trends, and that consolidated capacity through the end of 2020 is expected to be generally consistent with August 2020.”

United is not the only airline anticipating layoffs and furloughs going into Fall 2020. American Airlines said they may reduce their staff numbers, as they will cut in-cabin flight attendants to the minimum required by the Federal Aviation Administration plus one, starting in October.

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1 Comment

  1. White Eagle

    July 9, 2020 at 9:02 am

    UNITED is finally coming to a day of reckoning…After years of treating both PAX and employees like trash bags, UA may finally do the right thing. File for Chapter 7 bankruptcy. This would open a space for fresh air.
    An opportunity for the serious airlines in the industry to regroup and re-engineer themselves. One can imagine a better future—without UA’s slaughter of frequent flyer miles; seat backs that cannot recline; amputee legroom; savage security;—and all those unpleasanteries that UA “pioneered”.
    Let’s hope that we are on the verge of a new chapter in aviation: A return to serving the passenger. And NOT the inept CEO & his (her) cast of ignorant fools.

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