United Airlines could lay off 36,000 employees, or about 45 percent of its workforce, by October 1 due to a drop in air travel due to the coronavirus pandemic.
The fall term marks when a restriction against issuing leave and layoffs expires in a $ 5 billion airline payroll bailout.
United officials made the announcement Wednesday nearly three months before the deadline to give staff enough time to consider how the potential leave will affect their career with the carrier.
“None of the decisions we have made so far have been more difficult than the decision we are announcing today,” a United official said in a news release.
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United Airlines could lay off 36,000 employees, or about 45 percent of its workforce, by October 1 due to a drop in air travel due to the coronavirus pandemic. The courier’s fighter jets can be seen at Newark Liberty Airport, just outside New York City
A masked United employee is pictured behind a plastic barrier at Newark Liberty Airport. The airline may have to release employees by October 1 after a restriction on leave and layoffs in the airline’s $ 5 billion salary has passed
United, according to another official during the call, “burns $ 40 million every day,” Fox Business reports.
Shares in the airline ended at $ 32.53 on Wednesday, after falling about 7 percent from the first news of a possible leave the day before.
United was among the major U.S. airlines, including American, Delta, and Southwest, which received $ 25 billion in salary streams under a $ 2.2 federal incentive agreement designed to protect employees during the pandemic.
Aviation personnel had hailed the federal bailout as a way to maintain jobs in the crisis for nearly a million affected workers.
The airlines say they are hopeful that US demand, which initially dropped 95 percent due to coronavirus travel restrictions and state-imposed blockades, will recover in October.
However, some have warned that the air traffic slowdown could extend into next year and even longer, requiring another round of government support to survive.
United, meanwhile, offers voluntary programs that help employees consider retirement or other non-industry jobs. Tens of thousands of United employees have already taken voluntary unpaid leave, according to the airline.
The airline has already cut executive salaries, canceled non-urgent projects, and suspended nonessential recruitments to ensure that “involuntary leave would be a last resort.”
Shares in the airline ended at $ 32.53 Wednesday after falling about 7 percent on the first news of the possible leave a day earlier
One of the US officials said the majority of workers who may still be made redundant can return to work if demand returns.
Among the U.S. workers affected at the beginning of October are 11,000 workers currently working at the airport and 15,000 flight attendants.
Another 5,500 technical operations personnel and 2,000 flight operations executives may be affected, in addition to aircraft catering employees, contact and network operations centers.
The airlines say they are hopeful that US demand, which initially dropped 95 percent due to coronavirus travel restrictions and state-imposed blockades, will recover in October. United passengers were pictured at Tampa International Airport last month
A regulatory filing from the airline shows that United expects “a reduced demand for destinations with increases in COVID-19 cases and / or new quarantine requirements or other travel restrictions.”
“We continue to offer voluntary programs and are moving forward with our management and administrative reorganization to align our labor costs with general demand,” a United spokesperson told FOX Business in a statement.
“And we are in talks with our union partners to find creative solutions for our frontline workers, but we may need to take leave or take other measures,” the spokesperson explained.
“We are closer than ever to nearly a million airline employees, knowing they will receive their salary and maintain their health care and other benefits, at least until September,” said Sara Nelson, president of the Association of Flight Attendants, who is widely credited with the idea of help specific to payroll.
“At the same time, we have been able to curb the worst business practices by linking this support to restrictions on share buybacks, executive rewards and dividends.”