iluv2fly

Teldar Paper

catocony

Its always good to more or less know that a giant RIF is coming. In a regular economy, it's effectively a long notice that you'll get laid off. Nothing wrong with that, if you can find a different job, it's best to be first out the door. However, with the overall unemployment numbers so high, and all of the passenger airlines getting hit basically equally, there's no place to jump to.

The best bet would be to look for something but plan on staying at UA until the axe does fall. Be prepared for that as best as possible. Every airline, hotel chain, restaurant chain, rental cars, etc will all have some permanent RIFs this year in addition to some short-term layoffs, hour cutbacks, etc. There's no way to avoid it. United's bedside manner stinks as always, but the message is fair in the current environment. If a pilot can land a slot at FedEx or something, I would go for it now while the opening exists. There will thousands of pilots looking for those jobs, just like they were after 9/11.

scubadu

There will be "thousands" (actually, tens of thousands, make that millions) of all kinds of human beings looking for jobs during what is effectively a global economic shutdown.

Today AirBNB announced a reduction of 25% of the company, yesterday GE announced layoffs of approximately 16,000 (with more likely to come). Yesterday Golds Gym filed for bankruptcy. Norwegian Cruise Lines may go under completely.

United is neither unique or special in this situation. Just because the airlines you all don't fly or the hotel chains that you don't stay at, haven't yet been as public and as direct as United is being, does not, at all, mean that many of the same things are not about to happen across the travel industry and frankly all industries.

Almost nobody, in any industry, is "safe" in this situation and it's ridiculous to believe that public companies can guarantee employment in an environment where demand has effectively dropped to zero. If you all think United is "horrible" go have a look at what BA is planning...

BA to cut up to 12,000 jobs in "restructuring and redundancy programme"

{T}his will {not} be a "V shaped recovery" just because {we} want to get back on a plane as soon as they can. I think the fact that the stock market is not down all that much, relative to recent highs, is giving some the false impression that the stock market is the economy; it is not.

To steal a quote from a rather famous HBO series, "winter is coming" and it's quite possibly going to make the financial crisis look like a blip on the radar than didn't even happen...

Regards

uastarflyer

My employer made voluntary separation packages more lucrative than involuntary layoffs. Reading between the lines they were strongly recommending people take the VS package.

Asking for voluntary with no incentive isn’t going to gain many takers

mduell

If they stayed invested in a broad index fund they would have recovered in ~2.5 years, i.e. a decade ago.

catocony

I spoke most specifically about pilots since that is a specialist area. 100,000 office works are not competition for pilot positions, although 10,000 laid off pilots could be competition for the office drones. The same thing for mechanics - those are specialized jobs where the labor pool is fairly small.

The reason people are discussing airline layoffs is because this is a travel board and this section is about a specific airline. We're not discussing layoffs at Gold's Gym because it's not relevant to travel.

Gig103

My employer did the opposite of "more lucrative", they said if you voluntarily separate you waive your "priority recall" rights under the union contract, so the mid-career folks aren't leaving. Meanwhile, the folks they hope would leave voluntarily, the near-retirement folks, are often high enough performers management can't justify RIF'ing them involuntarily. So why not increase the separation package? Beancounters...

DELee

Robert Lucky's column from a few years back: The Bean Counters

David

joder

Maybe Kirby will voluntarily separate...

milepig

The part I don't understand is the "get a job elsewhere". Where are they supposed to go? are AA and DL hiring and I missed the message?

Weatherboy

It's surreal that just 5 months ago numerous GS agents were warning me there could be service interruptions due to an expected shortage of pilots on an ambitious summer schedule. Yet here we are.

xzh445

Perhaps the “looming pilot and mechanic shortages” will work itself out (somewhat) then?
Not saying this sarcastically. The prophecy of retiring professionals may somewhat offset the bloodbath of layoffs longterm?
Clearly, the market will be smaller, but retirements may help those starting or in mid career.

Started in aviation in 1981. Got out in 2011. Miss the people, but not the hassle every day since.

FlyingNone

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They'll be standing on line behind DL, B6, AA, and WN employees for whatever companies are hiring...... I guess that would be Amazon, Instacart and Door Dash. After all, aren't all the talking heads on TV saying "....it's perfectly okay (the constantly needed affirmation) to go out of your skill-set". ?? Yeah, I'm sure making $35/hour at United in customer service is going to be the motivation for $12-$15/ or less an hour minimum wage jobs "skill-set" ..... while you elbow your way through mobs of applicants from every other service job to be seen, heard and hired. I truly feel for airline employees and am grateful I retired 6+ years ago (after 35+ years).
I hope Kirby is losing a lot of sleep at night but he's probably counting sheep (or beans) or something with no real worries.

EWR764

A 10-20% demand scenario in 4Q isn't out of the question, but it's doomsday territory. At that level of demand, assuming best case cash flow estimates discussed in 1Q earnings calls (which assume a very modest demand improvement, and cost savings that have not yet been realized), AA/UA/DL/WN will burn through about $30b by Halloween. Looking at it from an industry perspective, there's only so much liquidity that can be raised... everyone will be headed to bankruptcy court if that's how things play out.

In that situation, it'll probably be as close to a collapse of the global economy as we have ever been.

The business has always been overwhelmingly cyclical. But nobody - nobody - could have seen this coming, much less prepared for it in a way that would allow an airline company to "weather the storm" without significant government intervention and/or bankruptcy.

{T}hose who are critical of United's management, as though their action, or incompetence, has somehow led to the current situation... do people actually believe every airline manager in the world isn't dealing with this exact same reality, and planning for the exact same scenario? Across the board, it is of a dramatically smaller future, with a smaller staff. United has been ahead of the rest of the industry with its dire predictions, but all carriers have eventually fallen in line.

Conventional wisdom is that other carriers with a higher domestic mix, or healthier balance sheet, may bounce back faster, and that's probably true. Still, nobody knows where the bottom is (hopefully we are at it), and when demand will return.

The true test of this management team will be in the emergence from the crisis... nothing that happened before COVID-19 matters much anymore, and everyone is in the same boat right now.

DELee

Disagree. UA's boat was drilled with holes to start 2020 by management deciding to shift their mileage accrual structure to enable "HVFs" and structured "discounts" for their contractual corporate accounts. Go back to the change announcements and a significant move from many folks who'd stuck with UA and/or CO, with a multiplicity that were their loyal FFs for decades.

Also, by implementing their refund delay/denial tactics as the pandemic unfolded and continuing even with the admonishment of DOT, they've engendered even more ill will.

And now, they can't even deliver on a schedule that would enable their HVFs and forcing folks to take multiple stops. The time sensitive HVFs will choose what works, not what UA forces them into.

They are sinking and they know it.

David