As the travel industry continues to struggle due to the ongoing coronavirus pandemic, United Airlines said on Wednesday that it was planning to deliver notices of possible furloughs to around 36,000 US-based frontline employees, or nearly 45 percent of its total staff.
The company's shares lost 3.3 percent in midday trading. However, not all employees who receive a notice will be furloughed, said United. The final number will depend on the manner in which the demand evolves and the number of employees accepting temporary leaves and early exit packages.
Losing $40 Million Everyday
The furloughs would begin on October 1, when a government-imposed ban on forced job cuts by airlines that accepted billions of dollars in federal payroll aid expires. "The United Airlines projected furlough numbers are a gut punch, but they are also the most honest assessment we've seen on the state of the industry," Association of Flight Attendants-CWA (AFA) President Sara Nelson said in a statement.
The Chicago-based airline continues to burn through about $40 million of cash every day, with a number of efforts to cut costs and raise liquidity failing to compensate for the drastic drop-off in travel demand as COVID-19 cases continue to rise in the United States.
Options of Furloughs
The furlough warnings vary by the workgroup. Flight attendants are among the hardest hit, with about 15,000 of roughly 25,000 set to receive notifications. United is working with the different unions on options to mitigate the final furlough number.
Flight attendants, for example, have been offered two voluntary furlough options, one lasting eight months through June 1, 2021, and another lasting 13 months through November 1, 2021, during which they would maintain benefits.
"But the fact remains that these projected furlough numbers are larger than the total size of most mainline airlines a decade ago," AFA's Nelson said, referring to the number of employees major airlines had before mergers.
(With inputs from agencies)