United Airlines will send layoff warnings to 36,000 employees — nearly half its U.S. staff —- in the clearest signal yet of how deeply the novel coronavirus outbreak is hurting the airline industry.
The outlook for a recovery in air travel has dimmed in just the past two weeks, as infection rates rise in much of the U.S. and some states imposed new quarantine requirements.
United officials said Wednesday they still hope to limit the number of layoffs by offering early retirement packages, and that the 36,000 number is a worst-case scenario. The notices being sent to employees this month are meant to comply with 60-day warning requirements at large companies ahead of mass job cuts.
The furloughs would include 15,000 flight attendants, 11,000 customer service and gate agents, 5,500 maintenance workers and 2,250 pilots. They would take effect on or shortly after October 1. United can't lay off workers before then as a condition of the $5 billion in federal payroll aid it began receiving this spring.
"This is exactly why the airline Payroll Support Program must be extended," Association of Flight Attendants President Sara Nelson tweeted in response Tuesday to early reporting on management's intentions by Kris Van Cleave of CBS News. AFA represents United's flight attendants. "The program was intended to get us through the period that our country could get the virus contained. The opposite has happened and this jobs program, the most transparent & successful, must be extended."
United hosted a town hall with employees Tuesday, which one long time United worker called "sobering," Van Cleave reported. Employees were warned at the meeting Tuesday the airline does not believe enough people have taken exit packages to avoid lay-offs and furloughs and "we are looking — at this point — at layoffs in the tens of thousands."
United executives said the notices would go to 45% of the airline's U.S. staff. Another 1,300 management and support staff will be laid off October 1, the company said. Including international employees, United currently has a total work force of about 95,000.
Air travel plunged about 95% from March 1 until mid-April, then began a slow recovery. The number of U.S. air travelers around the July 4 weekend was the highest since mid-March, but was still down about 70% from a year ago.
The havoc being wreaked by the coronavirus pandemic is hitting the job-rich aviation industry especially hard, with the International Air Transport Association predicting airlines will lose at least $84 billion in 2020.
In recent weeks, the number of new reported cases of COVID-19 has roughly doubled to about 50,000 a day. New York, New Jersey, Connecticut and Chicago have announced that people arriving from states with high infection rates will have to quarantine, throwing up yet a new roadblock to air travel.
United's traffic at its hub in Newark, New Jersey, has slumped more deeply than the rest of its network since those quarantine rules were announced.