With bookings down and cancellations on the rise amid a surge in new COVID-19 cases, United's furloughs will be a 'gut punch' to employees when federal coronavirus relief funding runs out.
United Airlines planes at Newark Liberty International Airport in Newark, N.J. Company executives call the COVID-19 pandemic the worst crisis in the airline's history.United Airlines planes at Newark Liberty International Airport in Newark, N.J. Company executives call the COVID-19 pandemic the worst crisis in the airline's history.
Demand for air travel continues to be weak, as the number of airline passengers is down about 75% compared with what it was last year at this time. And a recent uptick in demand leading into and through the July Fourth holiday weekend appears short-lived, as rising numbers of new coronavirus infections in many states have led to another sharp drop in airline bookings and an increase in passenger cancellations.
So United is warning about 15,000 flight attendants, 11,000 gate agents and airport customer service representatives, 5,500 mechanics and airplane maintenance workers and 2,250 pilots, among other employees, that they may be involuntarily furloughed on Oct. 1. That's when the $5 billion in federal payroll grants that United received as part of the CARES Act runs out.
Sara Nelson, president of the Association of Flight Attendants, calls the projected furlough numbers at United"a gut punch, but they are also the most honest assessment we've seen on the state of the industry."Congress allocated $25 billion in direct payroll grants to the airlines and made another $25 billion available to them in loans. United is one of 10 airlines that on Tuesday announced they had signed a letter of intent to secure the loans.
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