United Airlines has this week issued a shocking warning to employees. The big question is whether this is just an honest assessment of the situation, or whether there's an ulterior motive in the way that this is presented. The funding that US airlines received through the CARES Act precludes them from laying off any employees…
Continue reading: United Airlines Threatens To Furlough 40% Of Staff
Share your questions, experiences, and thoughts below.
We may complain about service and quality , however no one wants all these numbers of staff to lose their jobs. I understand over 60 million people work in the industry worldwide. Multiply that by family members and I guess it could be as 300 million affected by this calamity Add to that all the other airport workers , hotels , restaurants etc. People who don’t travel don’t spend money to go the the theatre , concert and so forth. The knock on affect is tremendous
Loads are down 75%. Why does it seem unreasonable that they are 45% overmanned?
The numbers don't add up...
United is supposed to be at 35% or 40% capacity in August.
You mean to tell me they plan to stay at 35% during Thanksgiving, Christmas, Spring break and Summer 2021?!
Meanwhile, AA released a schedule of being back at 75% capacity by Summer 2021 and being overstaffed by 7,000 or 8,000 FA's.
7,000 AA FA's vs 15,000 UA FA's facing possible involuntary forloughs.
The numbers do not add up to me for UA...
Everyone is trying to predict how air travel will be in say 3 months time but I think all the models the industry is using are pointing towards no tangible growth until Spring/Summer 2021 at the minimum. With the winter flu season bearing down on us in November through March it will be hard without mass testing to distinguish between flu and cold symptoms from CV19 so airlines have a huge headache on how to programme Q4 of 2020 and demand, I fear a lot more airlines will furlough in the coming weeks.
Sorry Sara, I do not agree the PSP has been the most responsible use of public money. There are millions of people out of a job in several industries. It's not appropriate that those in the airline industry get full pay and benefits, while those laid off in other industries lose benefits and must get by with unemployment.
I am a big fan of UA since they inherited me from CO so I come to this conversation as a friend. Based on UA's own traffic projections, which seem reasonable, the furlough numbers just don't sound right. I am certain this is a negotiating tactic to get "more", whatever more turns out to be. UA and Sara are setting the stage.
Problem is, there are many groups/segments in the US that also need a boost to keep going and so far have been left out. I am an owner of a small business. My suppliers in Asia were shut during 1st quarter and my customers (USA Corps and retailers) were in lockdowns during Q-2. Here we are in Q-3 and everyone is scared as hell over where their next check is coming from and scared of the virus itself. Luckily, I have been able to see my family through on savings as I have not received any PPP and my revenues have been zero. I am using my company as an example, not throwing a pity party. There are thousands of small businesses like mine. Some may get some help or have sufficient savings but many do not.
Schools are trying to make plans to open up for the fall and it looks like if you are not a DeVoss type private school, there will be no help from the Feds for public schools and State and local governments are drained by high Covid expenses juxtaposed with a shrinking tax base.
Speaking of Covid, I have not seen many initiatives to help first line responders, many of whom will have to deal with childcare if the schools end up only partially open and virtual for the rest (not that many K-12's have that together yet).
Sorry to ramble but my point is: UA, you will need to get in line with the rest of the country. There is tremendous need and suffering out there. Don't worry, I'll be buying those P class tickets again ASAP and I won't sell my UA stock.
I'm sure the administration will want to avoid the news of such a high-profile wave of layoffs just before the election. They're already going to be spinning wildly in October, denying the projected 200,000 deaths from COVID, so they'll need to address this wave of layoffs.
Expect an emergency extension of the CARES act for an additional 34 days.
This is nothing more than an egregious scheme to swindle more bailout money from the government.
If United Airlines were serious about reducing the number of furloughs, they would be taking more steps to generate additional revenue using nontraditional methods.
Demand for air travel is low...so why have prices on future flights not been reduced to commensurate levels to encourage more sales? They still have a flexible booking policy, so this isn’t exactly requiring people to commit to travel during the peak of a pandemic. Airfare can be purchased up to 330 days in advance. A lot can change between now and next spring. Better yet, why not start selling electronic travel vouchers at a discount and offer a two year expiration?!? The more you buy, the greater the percentage discount. For example, I just performed a quick search and UA airfare prices for R/T economy IAD-SFO-LIH around Christmas to New Years is still $900+. Lower the price to $600, I’ll take a calculated risk at this price, part with the money, and now United has more funding to help pay salaries in the near-term. Repeat 10 million times for other customers and start operating more like a business and less like a panhandler at a busy intersection.
I think Ben gets it right. Why should airline employees, especially highly paid pilots who presumably are in a good position to weather a period without their full income immune from being laid off whereas everyone else is not?
The objective was to keep the airlines from going bankrupt, not to cut the airline employees a special deal that protects just them..
Let the airline lay the workers off. They can draw unemployment just like everyone else.
The fact that a Senior Capt makes 300k [ I do not know this, I am taking Ben's word, which I am sure is true as their contract is public knowledge] doesn't matter...Just like the rest of us that Senior Capt lives a life style that his salary/career affords...Everyone seems to forget this when talking about any highly compensated individual...If he looses his 300k salary it [more then likely] will hurt just as much as a 80k salaried individual, or a 50k individual, or..., or..., or... and so on...
There is no reason to extend payroll just for airlines, as other businesses are still suffering too. If they extended it, then they also need to extend PPP. Otherwise is would be unfair for taxpayer to fund just airlines jobs. Also they need to take some kind of paycut on these payroll. As Ben mentioned, it is unforgivable for taxpayers to bankroll 100k+ salaries for doing nothing.
I think the union's comments are meant in hopes of getting more bailout money, if that isn't coming then I think the comments are going to be quite different.
I say no more free cheese. This has to end and it will be painful but it has to be done. Everyone thinks the feds borrowing money to pay them to sit on their butts is a good idea.
People don’t understand that airline is national security to the US. There’s no other effective mean of transportation other than the airline industry. The government need to keep them afloat. It’s part of essential services just like utilities. If there’s no service (every airline go under) there will be civil unrest just like there’s no electricity or running water (do we not have enough of them already).
It’s interesting how there’s no discussion like redundancy like in emirates thread. So many bashing Emirates for laying people off but when it comes to Americans company everyone think they’re the best employers. Great!
yes, a Captain makes 300K and lives a lifestyle supported by years of high earnings and yes it hurts just as much as someone who's making 80K a year. Point being the Captain CAN down grade his lifestyle and if he's been smart has not been living paycheck to paycheck and has some savings. Someone that works at the local mill and makes 30K a year may not have an option to live an even lower lifestyle as there is a minimum cost of living and substance. I'll be contacting my representatives and let them know we're all hurting, the Airline Industry will have to hurt with us. Based on my international travel on US carriers this would be a good time to clean out the retired on the job senior service staff!
Are pilots on 300k (not that there will be many) really getting paid full whack under cares act finding?
If so then that’s a failure of Congress not to put limits in.
In general for example U.K. scheme reimburses employers for 80% of salary to a maximum of £2,500 per month - about $3,100. Employers can pay salary levels above that but they get no reimbursement for it.
SEM wrote "If he looses his 300k salary it [more then likely] will hurt just as much as a 80k salaried individual, or a 50k individual, or…, or…, or… and so on…"
Studies clearly show this is not true. Low wage earners spend the vast majority of their income on housing and food. As incomes rise a household spends an every increasing amount on discretionary purchase such as recreation (think snowmobiles and jet skis), travel (Disneyworld), clothing, big TVs etc.
Low income households rarely have enough income to save. High income households save a significant portion of their earnings. You can check the savings rate by household income as these numbers are readily available but given the cost of living any pilot earning $100k/year let alone $300k should have substantial money put aside and available to get them through a substantial period of unemployment.
If anyone should be getting help its the low income airline employees although it's unclear why they should be treated differently than someone working in a restaurant or a hotel.
What are all of United’s Karens going to do? Maybe TSA or USPS could hire them, then they can continue to yell at customers.
Good article. I really like the observation of the taxpayer paying 300K USD to a pilot.
Isn't it interesting America's view of "socialism"? Helping those who will make the most noise while ignoring the most needy. A new twist on "rugged individualism".
SAS plans to lay off up to 50% of their staff. I think we can expect tough times for the airline industry worldwide.
Of course AA and UA are saying different things. AA is trying to convince people they're not going bankrupt so they said they'd be flying 75% of last summer's schedule. United, on the other hand, has repeatedly been playing the vastly different story of this being a very long recovery and trying to get employees to take voluntary separation packages and potentially more government money.
It's really quite transparent.
Agree with pretty much everything you said. The numbers may also be on the high end because they are giving out the worst case scenario. Its best to be open about it instead of low balling the estimates and then finding out they gotta furlough more than they initially thought. The US is going backwards. States are being forced back into shutdown. The president is pushing to force the reopening of schools. CDC is saying this action will put the country at the highest risk. In the end the federal government may fully kill our economy when everything is forced into shutdown. There isn't going to be demand for air travel. There isn't going to be a frickin viable national economy. I fail to see any reason why the government should prop up airlines going forward. Airlines are not coming back for a long time. That is the cold hard reality.
I’m a UA captain and I just took a $100,000/year pay cut under CARES. The airline has ways to do this by reducing hours, demotions, etc. (Regardless of what is being sold as fact).
I’m not complaining. I post this as an FYI to those who are wondering.