United Warns It May Furlough 36,000 Staff - The Wall Street Journal

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United Airlines Holdings said it could be forced to shed almost half its U.S. workforce.
Photo: David Zalubowski/Associated Press

Updated July 8, 2020 11:50 am ET

United Airlines Holdings Inc. UAL -3.16% said it could be forced to shed almost half its U.S. workforce, telling 36,000 employees on Wednesday that they could be furloughed from Oct. 1 because of the pandemic-driven slump in passenger demand.

Chicago-based United is the first major U.S. carrier to detail possible mass furloughs despite the billions of dollars in federal aid provided to airlines that covered payrolls through September.

A senior executive called the move “a last resort.” It follows the recent erosion of the fragile improvement in demand from April’s low, after a pickup in Covid-19 cases in some states and new quarantine measures in the New York City area and Chicago that have kept fliers from resuming travel.

The airline is still burning through $40 million a day, the executive told reporters Wednesday, adding that it could no longer count on a further round of government support to cover staff costs beyond Oct. 1.

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Overseas carriers including United’s alliance partner Deutsche Lufthansa AG and British Airways have already announced plans to shed large parts of their workforce, with airline and finance executives not expecting global demand to recover to 2019 levels for between three and five years.

American Airlines Group Inc. has warned it may have as many as 20,000 more staff than it needs to handle reduced demand, and may also have to issue furlough notices.

United employs 95,000 staff world-wide, and the potential furlough notices cover 45% of its domestic employees, though thousands have already taken buyouts in a program open through July 15. Unpaid leave and other offers also could ultimately reduce the number of involuntary cuts. Another United executive said the number of involuntary cuts required should be clearer by mid-August.

“There is definitely an appetite with our employee base to participate in these voluntary programs,” the executive said, adding that 26,000 had taken part in one or more of them this year.

The airline said those receiving mandatory notices under the Worker Adjustment and Retraining Notification Act of potential furloughs include 15,000 flight attendants, 2,250 pilots and 11,000 customer service staff. Employees would be rehired when demand recovers.