United Airlines sending ‘gut punch’ furlough warnings to 36,000 workers

FILE PHOTO: United Airlines passenger jets taxi with New York City as a backdrop
FILE PHOTO: United Airlines passenger jets taxi with New York City as a backdrop, at Newark Liberty International Airport, New Jersey, U.S. December 6, 2019. REUTERS/Chris Helgren

July 8, 2020

By Tracy Rucinski

CHICAGO (Reuters) – United Airlines <UAL.O> said on Wednesday it was preparing to send notices of potential furloughs to 36,000 U.S.-based frontline employees, or about 45% of staff, as travel demand hit by the coronavirus pandemic struggles to recover.

Not everyone who receives a notification will be furloughed, United said, with the final number depending on how demand evolves and how many employees accept early exit packages and temporary leaves.

The effective date would be Oct. 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.

The furlough warnings vary by work group, with about 15,000 of the total roughly 25,000 flight attendants set to receive notifications, United said.

(Reporting by Tracy Rucinski; Editing by Chizu Nomiyama and Sonya Hepinstall)

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