United Airlines may furlough a third of its pilots as air travel recovery stalls amid COVID resurgence

Jul 31, 2020

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The outlook is bleak at United Airlines as many travellers opting again to stay home amid the resurgence of the coronavirus pandemic across much of the U.S.

The Chicago-based carrier may need to furlough up to a third of its pilots, or roughly 3,900, due to the worsening outlook, United senior vice president for flight operations Bryan Quigley told pilots in an internal message on Thursday viewed by TPG. The airline previously warned just 2,250 pilots of possible furloughs.

“In recent weeks, bookings have stalled and we continue to see an impact of the recent increase in COVID-19 cases on our business”, he told staff. “Because COVID-19 cases continue, and demand improvement remains very slow, we may need to furlough more pilots in 2020, and in 2021, than originally planned”.

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The move comes a week after United CEO Scott Kirby said the airline expects the recovery in air travel to plateau at around half of 2019 levels until there is a vaccine for the coronavirus. He added that they do not expect a widely available vaccine until around the end of next year.

In effect, United could be roughly the size of Air Canada was last year — an airline about half its size — for the foreseeable future, according to Cirium schedule data for 2019.

United is not alone. American Airlines, Delta Air Lines, JetBlue Airways and Spirit Airlines have all warned staff of likely furloughs this year once employment protections under the federal government’s coronavirus aid package, or CARES Act, expire on 30 September. Southwest Airlines has said it can avoid furloughs until 2021.

Related: United Airlines may furlough up to 36,000 staff as coronavirus forces drastic cuts

Among the airlines warning of staff downsizing, Spirit is perhaps the most surprising. The airline’s low-cost ethos and primarily budget-minded leisure travellers are exactly the demographic that have resumed flying since the worst of the pandemic in April.

However, even holidaymakers are no longer returning the skies in significant numbers, leading Spirit CEO Ted Christie to warn on July 28 that the budget carrier could furlough between 20% and 30% of frontline staff.

Data from trade group Airlines for America (A4A) shows that net passenger bookings — new reservations minus cancellations — has held steady at down around 80% year-over-year since the beginning of July.

Related: United Airlines worries travel recovery will stall until there’s a COVID vaccine

American and United are backing a push by labour unions to extend CARES Act employee protections through March 2021. An extension could temporarily protect the jobs of tens of thousands of airline staff as carriers get a better handle on the trajectory of the recovery and their costs.

“There are really only two ways to mitigate the full impact of furloughs. The first is another stimulus bill”, said Quigley. The other are new agreements with unions that reduce expenses.

In addition, United has extended the deadline for staff to take early departure packages into August, according to a separate memo from the airline’s executive vice president of human resources and labour Kate Gebo viewed by TPG.

Airlines can reduce the number of furloughs and layoffs as more staff take voluntary packages.

Featured image by Justin Sullivan/Getty Images.

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