United has formally warned 36,000 U.S.-based employees of
potential furloughs when Cares Act payroll assistance expires on Oct. 1.
Some 45% of the carrier’s frontline U.S. employees were
given the warning, including 15,000 flight attendants, 11,000 customer service
and gate agents, 5,500 aircraft maintenance workers, 2,250 pilots, 1,000
contact center employees, 800 caterers and 225 network operations employees.
United executives cautioned Wednesday morning that not all
of those 36,000 employees will necessarily be furloughed. The final number will
be impacted by passenger demand and the number of employees who accept
voluntary leave. Thus far, approximately 3,700 frontline domestic employees
have taken voluntary leave, which offers extended separation benefits,
including health insurance and free flights.
The large majority of unionized United employees would have
the right to return to work when demand returns, but United executives said
that furloughs will be indefinite in length. The carrier said that employees
who are furloughed will be informed in August.
The warnings, which are required under federal law, were issued
to employees as demand at United has once again dipped, likely affected by a
surge in Covid-19 infections in the U.S.
In a regulatory filing Tuesday, United said that domestic
quarantine rules recently put in place in the Northeast are exacerbating the
problem. In Newark, United’s domestic bookings for the seven days that ended
July 1 were down 84% year-over-year compared with a domestic decline of 73% nationwide.
The carrier expects a similar impact in Chicago, where a domestic quarantine
order impacting visitors from 15 states took effect Monday.
In the Tuesday filing, United announced plans to temper its
capacity ramp-up. The carrier now plans to fly 40% of its 2019 domestic
capacity in August, down from the 48% it announced just a week earlier. United
doesn’t expect that 40% figure to increase in the foreseeable future.
United stressed that the airline has sought to limit
furloughs as much as possible. Along with the voluntary-leave program, United
has offered a short-term, unpaid-leave program, which has been taken up by tens
of thousands of employees.
In addition, the airline announced last month that it would
cut its management and administrative staff by 30%, amounting to 2,700 jobs.
United employs 95,000 people globally.
The carrier has aggressively raised capital, including $6.8
billion in loans completed this month, $3.8 billion of which was backed by the
Mileage Plus loyalty program.