E-Lines: January 08, 2021
January 8, 2021
Let's Talk about the Industry
Last year, all of the “big four” airlines, including United, were challenged first by the impact of diminishing revenue and then the virtual collapse of travel demand as the pandemic took over the world. What started as a ban of flights from China, spread through Asia, and rocketed then across the United States & Europe. With the implosion of our International routes, cruise ships became stranded, school and business closures and lockdowns spread across the world, and finally the domestic airline market essentially collapsed as well.
You know this, you were there. We’ve lived through this together. We’ve had various levels of participation on United Town Hall calls and updates, and we’ve needed to learn and understand more about revenue, load factors and market share than perhaps many of us would have liked. While some of us may have a greater interest in what happens behind the scenes than others at our airline, one fact most of us understand that is a reality for us at United is that a large portion of our revenue is derived from International and business travel.
Many of the businesses we depend on for revenue as well as those who could, began meeting virtually, instead of in person, reduced travel out of necessity. We’ve all become part of the “Zoom generation” that has learned to adapt and socialize on-line. The business community, much of which already had a foothold in this “virtual” area, moved to all on-line business platforms and cancelled travel.
United Airlines needs those customers to resume flying in order to return to profitability. These are high-yield, loyal and frequent travelers. While we’ve seen some proliferation within leisure travel over the past few months, it is not the bread and butter our airline depends on for growth. Most industry experts predict under the best circumstances, the industry will be 30% smaller at the end of 2021, and a full recovery is not likely until somewhere around 2023-2024.
While by no means a certainty, this is something we should keep in mind. When we speak of uncertainty, we are acknowledging a number of unknowns:
- When will a vaccine(s) be widely available and distributed?
- What border closures and restrictions with other countries in Europe and Asia look like this year?
- How soon will our business travelers begin to fly again?
- How soon will the general public feel safe to get back out again into the world?
One consideration that is important is that the “bread and butter” customer we mentioned is less likely to be impacted financially as much a typical leisure traveler. The pandemic has hit some of us harder than others; those who can transfer their work to home may have had little to no disruption, where front-line workers, gig workers and those in the hospitality industry have been impacted significantly harder. This provides an opportunity for our traditional customers to be among the first to return once those making these decisions feel comfortable returning to traveling.
Has the pandemic forever changed the business world and the familiar travel we associate with it? That remains to be seen, but we know that the cost savings achieved through online meetings simply cannot replace the value intrinsic in a face to face interaction when it comes to building business relationships.
We know from experience that online Zoom® calls with family, while necessary now, just aren’t the same. We expect business travel to return, but as of now, we can’t predict when or how that will occur. What we can do today is look at the decisions made this past year by our industry and what decisions are being made now with our competitors and within the context of what that landscape looks like.
The emergency relief offered through the PSP brings back all our furloughed flying partners through the end of March. But realistically how much has the travel industry rebounded since the initial reduction in force was applied this past October?
Of significance, in October, we were looking at a very bleak holiday travel period, which is traditionally a big revenue generator followed almost immediately by first quarter flying, which is typically among the lowest demand period of the year.
What we see looking forward in April is the spring break vacation period, closely followed by summer travel. While spring break will, like everything else right now, look different, it is historically a time of increased travel; with the summer period being our busiest of the entire year. While management has said they don’t see significant improvement in our immediate future, we know from this past holiday season, that people are generally booking much closer to departure than in previous years. While soaring demand isn’t likely, given the recent introduction of the vaccines, it is quite possible things could improve this Spring and Summer.
Another difference is that our work force is several thousand Flight Attendants smaller than we were when these processes started prior to October. Through voluntary separation programs (VSP), international base closures, and attrition, we are already permanently smaller as a work group.
So, the outlook for the period from October into the Spring and Summer, is that we have reason for a potentially more optimistic view. The facts we’ve just reviewed, would normally indicate a need for more Flight Attendants than were projected in October. We also have vaccines being distributed which adds another layer of potential optimism for revenue. So, while the immediate outlook may not be outright bright, it is definitely much better than it was in October.
Let’s also look at our friends and competitors in the industry, beginning with American (AA). AA took measures similar to United in aggressively reducing their workforce through furloughs. While not as aggressive as United, their approach follows a similar plan. As we move into 2021, it’s worth noting that AA is not weathering the storm as well as the rest of us. AA took on over $10B in debt in 2019, and in a “good” year, AA generates little over $1B in profit. That would mean if recovery were to happen significantly and soon, it would take AA the next 10 years just to pay back the 2019 debt, without even considering the debt they already had before the pandemic started. While we in no way wish any of our industry friends ill, many industry experts are predicting the U.S. airline industry may not be able to sustain the “big 4” through 2021. It’s important to note, that United is similarly situated in terms of debt. While perhaps not in the most solid financial position either, we are in a better position than AA.
Talking briefly about Delta (DL), they successfully negotiated concessions from their Unionized pilot group. Their Flight Attendants do not have a Union, and operate under rules that management can change at their whim. To date, DL has not furloughed any Flight Attendants, but has imposed cuts on some ground and other workers. While it remains to be seen what they will do in 2021, so far, they have managed to reduce employee costs mostly through voluntary means. Their financial position is second only to Southwest (WN).
According to experts, WN started this crisis with the strongest balance sheet and most money in the bank. WN’s approach to the crisis has not been one of furloughs, which they considered throughout the 2020 year, but looked at much more as a last resort, than a first choice. WN management came to their Flight Attendants, pilots and other work groups with requests for concessions. Those requests were met with a respectful but firm decline to negotiate any Contractual changes, as a “fix” to a pandemic out of their control. Even without the extension of the PSP in October 2020, WN management found voluntary ways to make it work.
WN has weathered the storm well so far, and has gone so far as to pledge they will not furlough any employees at all (with or without a PSP) in 2021. Their management has committed to work with their Unions and workers to avoid furloughs and instead vigorously pursue discretionary and voluntary time off options that help them reduce immediate costs, while keeping everyone employed. Of note, WN has never furloughed an employee in their nearly 50 years of flying.
This may be a long history lesson about our industry and the 2020 pandemic, but understanding the choices we’ve made and that we will be required to face going forward is important for us in understanding how we are situated in comparison to our competitors when establishing common ground for discussions.
When we look at the landscape of our industry, we have one airline where it appears challenges will continue, another airline that has negotiated concessions with their pilots and can change work-rules at whim with their Flight Attendants to suit their purposes. Our airline has taken a aggressive action to institute dramatic cost cuts and management has signaled they are considering a path towards continuing this stringent approach if this is what is needed to be taken this Spring. Then we have the last airline, pledging no furloughs at all in 2021, and committing to manage overstaffing through voluntary programs.
It’s just a fact: the landscape, outlook and future are brighter in April than they were in October, and if another airline can manage no furloughs, surely, we are in a position to dramatically and meaningfully reduce, if not eliminate, the need for involuntary furloughs.
Keep it Safe and De-Escalate
Following the violence at the Capital on Wednesday, United issued a Safety reminder about our role on the aircraft and the importance of de-escalation in circumstances that might become confrontational. It’s likely that we will continue to face political differences of opinion at least through Inauguration day and possibly beyond. We are equipped to respond to these differences of opinion and de-escalate tense situations. Our training as safety professionals has prepared us to be responsive in the interest of the safety of flight, passengers and crew.
As our training has taught us, we respond to behaviors, not opinions. Those whose behavior might potentially pose a threat to the safety of flight based on behaviors should be addressed while the aircraft is still at the gate. If necessary, anyone whose behavior is potentially threatening or non-cooperative should be restricted from travel based on their actions.
Beginning every flight with a good crew briefing involving the pilots and all Flight Attendants forms the solid foundation of safety. Adherence to current mask policy, including announcements is not only important, it is required. When on the ground use the resources available to you, including the captain and customer service personnel to do our best to head off problems where resolution on the ground is easier than it would be in the air.
It never hurts to have a co-worker with you or standing by observing to be able to step in and lend support when needed. Remember our goal is to ensure compliance with United’s policies, all of which are designed for the safety of flight, while also ensuring any potential escalation of tensions is reduced at the earliest point. Always remember – we are never alone. We have other crew on the aircraft and many people on the ground all of whom are prepared to work together with us to achieve positive, safe outcomes. Let’s be sure we stand together!
Compassion, Kindness and Tolerance
The events of the past couple of days in Washington, D.C. have had different impacts on each of us especially as we learn of the injuries and deaths of some of the people involved. As Unionists, we value and cherish our ability to protest, however, we also understand that violence cannot be tolerated - period.
As a diverse group of individuals, we collectively bring our personal best to all that we do. As with any family, we may have differences of opinion, beliefs, faith and most relevantly, politics. We need to remember, anytime we engage with each other at work, on layover, in social settings or on social media, being respectful of each other is of tantamount importance.
To say that passions are running higher than ever before right now would be an understatement. Each of us value our different viewpoints and we can be equally passionate in presenting them. And while we all have a right to our opinions and views, and the right to express ourselves in appropriate situations, we are a family of Flight Attendants and need to find ways to be together, always respectful of each other.
No one is suggesting that anyone change their views; we are merely suggesting we express them at the appropriate time and place. If we are challenged to find common ground, we should simply not engage on those controversial topics with one another as they relate to our work, including when we interact with each other on social media. In each exchange, we are interacting with people who are much like ourselves. While we may be passionate, and may feel righteous in our convictions, we must understand those with whom we are speaking likely have a similar strength of conviction. Actively working to change the world, or arguably even harder these days, to change one person’s perspective is never successful when anger is used as the primary tool to accomplish that objective. Tolerance, listening, compassion, empathy, communication, kindness, generosity – these are all tools each of us has as United Flight Attendants. These are the methods we should use to engage one another because it is through these efforts that we ultimately learn we have more in common than that which could ever divide us.
The words of Abraham Lincoln have real meaning and are applicable to our current situation: “I am loath to close. We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.”
Tensions are high, and for many the stakes are equally high. We must all be a piece of the puzzle to bring about the mosaic of compassion. Compassion and tolerance must prevail to ensure we present the best versions of ourselves. And, together, we can do this.
Emotional Support Animals
The federal government has enacted a new rule restricting the types of service animals allowed on commercial airline flights, allowing only dogs that meet specific training criteria.
The new Department of Transportation rule is in response to a growing backlash in recent years to airline passengers trying to bring all kinds of wild and outlandish pets onto planes, including the woman who tried to bring an "emotional support" peacock on board a United Airlines flight in 2018, and the "comfort" turkey that was actually allowed to fly on Delta Airlines back in 2016.
Until recently, the reason they've been allowed on a plane is because of travelers exploiting a loophole in federal law to avoid paying for their pets to fly with them. Most airlines charge passengers a hefty fee to bring their small pets with them inside the cabin, but federal law allowed people with disabilities to have service animals free of charge, including emotional support and comfort animals, without defining what those are.
Alaska Airlines was the first to announce a ban on emotional support animals, followed by American who stated: “starting February 1, 2021, only trained service animals can fly in the cabin and you’ll need to complete and submit the U.S. Department of Transportation (DOT) Service Animal Air Transportation form before your trip. If you’re traveling with an animal that doesn’t qualify as trained service animal, it may be transported as a pet.” Currently American contemplates a $125 - $250 fee to travel with your pet, much to the chagrin of those who have, thus far, gotten a “free ride.” Some industry experts peg this change at about a $60m increase in revenue annually. United announced late today that they now are also banning emotional support animals beginning this Monday. More details to follow, but good news for our Flight Attendants.
Insurance Premiums for IVFMP
Those Flight Attendants transitioning from the IVFMP program and returning to flying full time, will pay for healthcare benefits via payroll deduction effective back to January 1, 2021. Payroll deductions for January will be deducted on the first or second paycheck in February – and any amounts that have already been paid through direct billing (via YBR) for periods after January 1 will be refunded. Efforts are being made to resume payroll deductions as quickly as is practical.
We realize this may mean that some of you who have already paid the cost, will be charged again and then subsequently refunded. We have worked with United to try to avoid this but have not been successful. The refunds, if applicable, will happen automatically, and you do not need to do anything. These refunds will be processed in the same way they were received – either to a check or directly back to the account from which any ACH payments may have been taken.
Keep in mind it is your responsibility to pay any amounts owed from 2020 for any prior months no later than February 28, 2021 or benefits will be discontinued back to the effective date on your most recent billing statement.
AFA PSP Q&A
In our ongoing effort to keep you informed and answer questions, we have published a Q&A that addresses some concerns we’ve been hearing. Please contact your Local Council with additional questions you may have.
Winter 2021 Regular Meeting of the United MEC
The United MEC will meet for the regular Winter meeting on January 26 and 27, using a virtual Zoom platform, as we have the past several meetings. Details, including how you may join the meeting as a spectator will be available shortly. The morning 9am to noon sessions of each day will be open to members in good standing. The MEC will also meet in closed session from 1 to 5pm both days.
Reminder and Quick Links
January 12 – February Schedule Bidding Opens
January 17 – Bidding for February Schedule Closes 0800 HDT
January 29 – First Trimester CQ CBT Due
January 30 – First day of the February Bid Month