United Air Warns Grim Outlook Threatens a Third of Pilot Jobs

(Bloomberg) -- United Airlines Holdings Inc. warned that it’s considering furloughs for as many as one-third of its nearly 12,000 pilots, citing a resurgence in U.S. coronavirus cases that’s weakened sales.

“In recent weeks, bookings have stalled and we continue to see an impact of the recent increase in Covid-19 cases on our business,” Bryan Quigley, senior vice president of flight operations, wrote Thursday in a memo to United pilots.

United’s planning for a further “significant reduction in business” would drive 3,900 pilot furloughs, “and that may not prove to be enough,” Quigley wrote.

United had planned to furlough 2,250 pilots this year -- a number that was expected to be reduced by voluntary leave programs and an early-separation package offered to the carrier’s most senior pilots. Instead, the number could almost double as the virus rages in many parts of the U.S.

“Because Covid-19 cases continue, and demand improvement remains very slow, we may need to furlough more pilots in 2020, and in 2021, than originally planned,” Quigley wrote. The Chicago-based airline has 11,675 active pilots.

The Air Line Pilots Association union is preparing a statement, a spokesman said.

Slow Recovery

Last week, when United reported an adjusted $2.6 billion quarterly loss, executives said they anticipate sales to plateau at only half of 2019 demand levels until a Covid-19 vaccine is widely available, which they didn’t see happening until late 2021. Sales need to quadruple from current levels to reach that 50% point, Quigley wrote, underscoring the depth of the revenue downturn.

To date, 6,000 employees have agreed to quit the airline and another 26,000 have taken voluntary leave programs, the company said July 21.

Airline labor unions, including ALPA, have been vigorously lobbying Congress to extend payroll support funds for six months to avoid mass industry job cuts in October. The current payroll program -- and its protections -- ends Sept. 30.

United supports that effort, Quigley said, though he noted that it’s unclear whether Congress will approve additional funding. “The only other way to mitigate furloughs is through a negotiated agreement with our unions to reduce the cost until we see a return of demand to our business,” he wrote.

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