United Airlines’ pilots have agreed to measures, including reduced flight hours, that would avoid 2,850 furloughs that had been scheduled to begin later this week.
Still, the Chicago-based carrier may furlough about 12,000 employees in other work groups when the federal payroll support programme (PSP) funds enshrined in the US goverment’s CARES Act, passed in March, expires on 1 October.
“First and foremost, this agreement stops the imminent furlough of thousands of our pilots,” United senior vice-president of flight operations Bryan Quigley says in a message to pilots on 28 September. “It also allows for many of the previously announced displacements to be cancelled, and in the coming days we will allow those affected pilots to reconsider their options based on the information that is now available.”
Pilot union Air Line Pilots Association, International (ALPA) also praises the agreement, which was proposed on 16 September, and about which the airline’s pilot population voted on in the past week.
“Our members understood that in order to protect pilot jobs, we needed to approve this agreement,” says Todd Insler, the chairman of United’s section of the pilot union. “We’re spreading the existing flying among our pilot group while locking in permanent contractual gains. I am proud of our pilots for showing the unity and resolve needed in the face of uncertainty.”
The company says the planned pilot furloughs for 2020 and 2021, which would have amounted to 3,900 jobs, or about one third of the airline’s total pilots, are now off the table until June 2021
The agreement reduces the number of hours individual pilots fly every month, effectively spreading fewer hours across the pilot population. More-junior pilots will give up more hours than those higher on the seniority list. For senior pilots, a new early-exit programme is available.
About 450 pilots have already taken advantage of the early-retirement scheme, and the airline is hoping to entice 655 more to do so.
United and its pilots came to an agreement in the face of ongoing depressed passenger demand as the global coronavirus crisis drags on. The airline is flying just more than half of its previously scheduled capacity, and thousands of US aircraft are still grounded due to the slow pace of recovery.
But United and its peers are walking a fine line between cutting costs and preparing the airline for an eventual recovery when passengers are ready to travel again. Bringing back furloughed pilots is sometimes complicated and time-intensive due to recurrent training requirements.
The airline says 58% of pilots ”voted themselves a pay cut because they believe in the strategy, and how beneficial it is for our future”.
Other airline work groups are still negotiating with the company, with the hope of averting planned furloughs on 1 October. United says it expects less than 12,000 employees will be furloughed, about one third the number of potential furloughs the airline initially announced in early July.
About 7,000 United employees have taken early exit packages, the airline adds.
Later this week, the federal financial assistance that was passed in March as part of the $2 trillion CARES Act expires. The $58 billion set aside for airlines prohibited them from laying off employees before the end of the third quarter. That deadline is just two days away, and the air transport industry is still struggling with depressed passenger demand due to travel restrictions in some parts of the US and overseas, and customers’ apprehension to travel.
Some regions and numerous other countries, including Canada, retain measures such as 14-day quarantine requirements, in an attempt to stop the spread of the virus.
Last week, two US senators introduced a bill that would provide airlines with another $28.8 billion in funds earmarked for employee expenses incurred through March 2021.
Similar to the March relief law, the follow-up bill would require airlines to maintain service to destinations already served, until 1 March 2021. Airlines taking funds would also be prohibited until 31 March 2021 from laying off staff or reducing pay and benefits.
