One of the largest airlines in the United States and globally, United Airlines Holdings Inc., warned on Wednesday that it could lay off 36,000 employees since October 1. Almost half of these employees are flight attendants. The company employed about 96,000 people as of December. This step of United confirms the deplorable state of the industry caused by the effects of the COVID-19 pandemic.
“None of the decisions we have made so far have been more difficult than the decision we are announcing today,” a United Airlines spokesman told at a news conference on Wednesday.
According to the official, the airline is still “losing $40 million daily” making a number of efforts to reduce costs and increase liquidity, but this does not compensate for the sharp decline in demand for travel.
According to the airline, warnings will be sent to about 15,000 flight attendants and more than 2,200 pilots. The airline also said more than 4,500 mechanics and technicians, as well as more than 11,000 airport employees would receive notifications warning of layoffs, pay changes or retraining.
The law of the United States requires employers to notify employees of possible dismissals or temporary leave within 60 days. United Airlines and other airlines that have received federal support for $25 billion in wages are barred from firing, taking unpaid leave, or cutting staff pay rates until October 1.
The airline said on Tuesday that capacity has decreased by about 88% in June compared to the same period last year, and in July and August is expected to decrease by about 75% and 65%.
According to the applications submitted by the airlines to the SEC (US Securities and Exchange Commission), the number of bookings on domestic flights has dropped significantly again since June 16, as the number of COVID-19 cases across the country is growing. According to the applications, booking tickets departing from Newark, New Jersey, decreased by 84% compared to last year, and 73% at other airports.
According to the United Airlines spokesman, the company hopes that most of its employees will be able to return to work “as demand returns.” However, the airline believes that a significant return in demand will not occur until an effective vaccine or treatment for COVID-19 is released on the market. Industry officials say the recovery will “take years.”
“We continue to offer voluntary programs (early retirement) and reorganize management and administration to match our wage costs to general demand,” a United Airlines spokesman told FOX Business on Tuesday.
The company is working with various unions on options to mitigate the final number of vacations. For example, flight attendants have been offered two options of voluntary leave, one lasting 8 months until June 1, 2021, and the other one 13 months until November 1, 2021. During this period, they will receive benefits, according to internal documents of United Airlines considered by Reuters.
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