Over 60% of JetBlue crew have taken voluntary leave from the airline to prevent furloughs in October. According to the conditions of the CARES Act loans, airlines cannot furlough staff until October 1st at the earliest. If enough staff take voluntary leave or early retirement, JetBlue is hoping it will not have to furlough any staff at all.
CARES act funding saved jobs
JetBlue CEO Robin Hayes has said staff at the airline have been more than willing to take unpaid holidays as well as make use of voluntary leave programs. In an interview with the Washington Post last week, Hayes said,
“We have a number of voluntary programs that crew members have taken. We do have a lot of crew members who wanted to take the summer off.”
Without the funds from the US government’s CARES Act, “the sensible thing to do would have been just to ground the fleet and furlough the vast majority of our people. We’ve never furloughed anyone before, so that would be hard.” However, the $935m federal bailout has been used to fund wages while voluntary leave programs and early retirement offers has driven down the fixed costs at the airline.
The success of voluntary leave programs
Several airlines have also stressed that, thanks to federal funding, they are able to keep staff on the payroll until the fall. However, many have said that unless voluntary leave programs are successful, October 1st may see vast numbers of staff cuts.
For many airlines, offering early retirement packages was crucial for minimizing payroll costs. The CARES Act means staff cannot be furloughed, nor can airlines reduce pay. Several airlines have gotten around this by furloughing temporary staff and claiming they are not full-contact employees, and by reducing the number of hours employees can work. This workaround means employees aren’t having their pay cut or being furloughed, and therefore this is in compliance with the CARES Act conditions.
Is this the whole story?
While Hayes likes to frame the JetBlue time off as a voluntary move, indicative of a solid sense of teamwork, other outlets have taken a different stance. One Mile At A Time goes so far as to say that, actually, the leave was mandated by the airline.
In the article, OMAAT cites an internal memo stating all crew members were being subjected to “implement mandatory unpaid time off.” Further, it says the memo reads,
You will be required to take 24 days of unpaid time off (UTO) between April 20 and September 30, 2020.
To be fair to JetBlue, if these accusations are indeed true, it would not be the only airline undertaking this type of action. Indeed, United Airlines has also mandated 24 days of unpaid leave, while Delta has reduced hours for certain staff.
Whether these UTOs are really voluntary or are actually mandated by the airline is not confirmed. Either way, it’s certainly better than facing up to mass layoffs come October.
The airline previously stated it was using $10 million of its savings every day to try to stay afloat.
Getting back to normal
Despite hoping to avoid furloughing staff, Hayes confirmed that he does not expect the industry to recover quickly. Therefore, JetBlue will “be a smaller airline then than we would want to be”. Hayes also confirmed that furloughs are still an option but implied they are the last resort.
As well as operating a smaller network and fewer planes, JetBlue is preparing to operate flights without maximin capacity. Hayes said he expects flights to include social distancing for some time. The effect of this means flights operating half empty, which cuts into profits.
In these circumstances, it’s difficult to think that JetBlue, and other airlines, will be able to avoid furloughing staff. Even with staff pulling together and taking time off, we may still see some cuts come the fall.
What do you think? Will JetBlue manage to avoid furloughing staff? Let us know what you think.