United Airlines says it will furlough up to 2,850 pilots this fall unless the federal government provides more coronavirus-relief money to the nation’s airlines
CHICAGO — United Airlines said Thursday that it will furlough up to 2,850 pilots this fall unless the federal government provides more relief to help airlines cover their labor costs during a pandemic-fueled downturn in travel.
United’s figure is higher than the 1,941 pilots that Delta plans to furlough and the 1,600 targeted for termination at American.
The Chicago-based airline told pilots it will send furlough notices by U.S. mail in the next few days, with the cuts taking effect between Oct. 1 and Nov. 30.
The airlines and their labor unions are lobbying for another $25 billion to help the companies cover payroll costs for six more months, through next March. However, talks between the White House and congressional Democrats over a larger virus-relief measure have stalled.
Earlier this year, Washington set aside $50 billion in grants and loans for passenger airlines, including $25 billion to keep workers on the payroll through September.
Travel hasn’t rebounded as quickly as hoped, however, as the U.S. has failed to control the coronavirus outbreak. Travel restrictions remain in place to prevent more spread. Delta, United, American and Southwest lost $10 billion between them in the second quarter.
The Allied Pilots Association backs the industry’s request of another $25 billion over six months to help prevent 19,000 American Airlines furloughs.
The Allied Pilots Association (APA) sent a letter to President Trump this week on behalf of the 15,000 American Airlines pilots it represents, urging an extension of the federal Payroll Support Program that ends after next month.
The airline industry had predicted a recovery by now, but APA spokesperson Gregg Overman said COVID-19 is still around so potential passengers are still afraid.
“There’s a dearth of things to do in the cities that we serve,so a lot of travelers have stayed away,” Overman said. “The demand for business travel is almost nil. If you look at the statistics for travelers passing through TSA portals it’s just flat out dismal.”
Pilots support what the industry’s requesting – another $25 billion over 6 months. That could help prevent 19,000 furloughs, in the case of American Airlines. Overman said carriers are also considered critical infrastructure by the U.S. government.
United Airlines warns of even deeper layoffs than previously discussed because of weakening demand due to the latest coronavirus spike
New York (AFP) – United Airlines is now planning for even deeper furloughs of pilots following the latest weakening of air travel demand due to the coronavirus, a company official said Thursday.
The big US carrier currently is planning for 3,900 pilots to be furloughed, up from 2,250 expected in early July before the latest spike in US coronavirus cases that has led to another deterioration in customer interest.
“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,” Bryan Quigley, senior vice president for flight operations, said in a memo to staff.
Quigley said total revenues for the airline are down about 85 percent. The company expects to end the third quarter with a daily cash burn of $25 million per day.
“This is simply not sustainable for us,” Quigley said.
United has previously said it does not expect airline travel demand to get above 50 percent of pre-coronavirus levels until a vaccine is found and widely available. The company’s chief executive Scott Kirby said last week that he is planning for this outcome until late 2021.
Unions for airline workers are lobbying for additional funds from Congress to support jobs in the industry.
Quigley pointed to those efforts, adding that the “only other way to mitigate furloughs is through a negotiated agreement with our unions to reduce the costs until we see a return of demand to our business.”
Allegiant Air has posted a $93 million loss for the second quarter as it prepares to furlough up to 275 pilots. Moving forward, Allegiant is working on making sure it is flexible and can survive the crisis. However, the airline and its pilots are at an impasse, leading Allegiant to announce the furloughs.
A $93 million loss Allegiant lost $93 million in the second quarter of 2020 compared to $33 million in the first quarter of 2020. The airline recorded total operating revenue of $133 million- just about 73% lower than the same quarter in 2019.
In the second quarter, capacity and departures were down about 50% from the same period last year. However, this didn’t stop the carrier from seeing some incredible passenger numbers. During the second quarter, the airline’s share of passengers was about 5% of all TSA passengers screened- higher than the airline’s traditional market share.
While June was an excellent month for the airline, it was not enough to get beyond the low points the carrier experienced back in April.
Furloughs and job losses are coming Allegiant Air is preparing to furlough up to 275 pilots. CEO Maurice Gallagher stated the following:
“Unfortunately, our pilots leadership is unwilling to work with us on this approach. And, as a result, we have notified the IBT management that we intend to furlough up to as many of 275 of our crewmembers, pilots that is. While we regret having to do this, these numbers will allow us to optimize both the peaks and valleys in the coming months and into 2021.”
IBT, or the International Brotherhood of Teamsters, represent Allegiant Air’s pilots. The two entities have worked together in the past. But, now, it appears that management and pilots are on two different pages.
Alongside the furloughs, Allegiant will be letting go of 87 of its employees on October 1st. A total of 220 positions, including those 87 employees, will be eliminated. Most of those positions are vacant, including people who have already left Allegiant or else are empty roles that Allegiant has not hired for yet. The airline’s executives stated these were in corporate and administrative positions.
What are the peaks and valleys? Allegiant Air is a leisure airline. The carrier does not rely on business travelers to tide itself over during the low times- instead, it reduces its schedules to a sustainable amount and gears up for the next peak.
During the valleys, Allegiant Air does not need as many employees as during the peaks. In normal years, Allegiant does not have to engage in mass furloughs or layoffs because the airline has the cash to tide itself over. However, 2020 is not a typical year. With losses piling up, Allegiant needs to ensure that it is not bleeding cash during the low season- which will start in the next few weeks.
The next big peak for Allegiant will start in November with the US Thanksgiving holiday. Then, in December, the Christmas and New Year’s holidays will be a big boon for the airline. This year’s winter peak, however, will not be as bountiful as previous winter holiday seasons, so Allegiant does not need as many employees at its winter peak as it previously anticipated, leading to the layoffs, furloughs, and eliminated open positions.
Flexibility with fleet As proof of this, Allegiant has laid plans to retire seven Airbus A320 aircraft. Five of these will be by the end of the year. One will be retired in 2021, and the final of these seven will be retired in 2023. Also, if demand continues to remain low and recovery prolonged, Allegiant’s team has identified 22 additional aircraft that could be candidates for retirement or storage.
On the other hand, if demand improves, Allegiant’s team has outlined several used aircraft that could enter the airline’s fleet. Used aircraft are cheaper for the airline to acquire. Acquiring used aircraft is nothing new for Allegiant. The team has taken on several second-hand planes in the past.