United Warns of Possible Job Cuts if Government Doesn't Act Quickly
March 20, 2020
Image: Loren Elliott/Reuters
United Airlines on Friday warned it could cut jobs if the U.S. government doesn’t provide aid by the end of the month to the industry, which is struggling with the devastating impact of coronavirus on travel demand.
U.S. airlines, which directly employ close to 750,000 people, are on edge about how quickly lawmakers will provide aid to the industry, grappling with a collapse in demand that executives have described as worse than 9/11.
United and its competitors have raced to slash flights, freeze hiring and ask employees to take unpaid leaves, but executives have warned it’s still not enough.
“However, as travel demand continues to plummet, even more cost-cutting measures will be required soon to keep our company afloat,” said United’s letter on Friday, which was signed by CEO Oscar Munoz, president Scott Kirby — who’s scheduled to take the reins in May — and union officials representing flight attendants, flight dispatchers and others. “To be specific, if Congress doesn’t act on sufficient government support by the end of March, our company will begin to take the necessary steps to reduce our payroll in line with the 60% schedule reduction we announced for April.”
The Chicago-based airline had some 96,000 employees as of the end of 2019. In the letter, executives warned the schedule in May could be further cut.
U.S. airlines are seeking $58 billion in aid, according to Airlines for America, a lobbying group that represents United, Delta, American, Alaska, JetBlue and others. That proposal includes $25 billion in direct grants and another $25 billion in loans for passenger carriers.
Senate Republicans on Thursday proposed legislation for $208 billion in aid to industries hurt by coronavirus, including $50 billion for passenger airlines, but that bill calls for loans, not grants, falling short of what the industry asked.