As air travel is at a halt and there are no signs of federal help. Therefore, United Airlines plans to furlough about 16,000 of its frontline employees in less than a month’s time.
United Airlines in a memo to its employees wrote that 16,370 employees will be furloughed. When the federal bailout restriction expires on October 1.
United executives said on Wednesday this furlough is less than half of the airline’s furlough that it forecasted in July. It is because 7,400 employees accepted early retirement to or voluntary departures. And some are taking unpaid leave.
United’s memo calls furloughs a “heart-wrenching” last resort. But the airline “cannot continue with staffing levels that significantly exceed the schedule we fly.”
“It is our expectation that things don’t get anything back close to normal until a vaccine is developed and widely administered,” said a United executive on a briefing call. He stressed that an extension of CARES Act payroll protection can stem furloughs. And that the airline in touch with the White House and congress but a new bailout appears unlikely.”
“To be clear, an extension would be the one thing that would prevent involuntary furloughs on October 1. And hopefully delay any potential impact on employees until early 2021,” reads the memo.
Financial Loss Due to the Pandemic
However, this decrease in demand is causing the airlines massive losses. The Delta, United, American, and Southwest lost $10 billion between them in the second quarter.
United Airlines announced that it has lost $1.6 billion in the second quarter as air travel was down because of the pandemic.
However, the airline’s net collection was just $1.4 billion in revenue. This is an 87.1 percent drop as compared to the same quarter last year, with capacity falling 87.8 percent.
But there was a somewhat positivity in the airline’s announcement, things were not nearly as bad as they could have been.
Delta Air Lines also announced its second-quarter performance which is worse than United. However, the airline’s net loss for the quarter is $5.7 billion.
United Airlines is laying off 2,850 pilots this fall the airline announced. If it does not get the government relief aid, which was provided to the airlines to cover their labor costs during a pandemic it will have to implement layoffs.
However, United’s number of laying off pilots is higher than the 1,941 pilots that Delta will furlough. Whereas American plans to terminate 1,600 pilots.
The Chicago-based airline told pilots it will send furlough notices by U.S. mail in the next few days, with the cuts taking effect between Oct. 1 and Nov. 30.