In an internal presentation, United Airlines has prewarned thousands of employees that furloughs and layoffs may happen come October 1st. The airline has to give employees 60 days’ notice if they are affected. Although today’s warning is not the start of the official notice period, it is alerting staff that formal warnings may be issued soon. According to the terms of the CARES act, US airlines cannot lay off staff until after September 30th.
Advance warning deadline approaches
United Airlines has been offering staff early retirement and voluntary leave packages in an attempt to lessen its current costs. The airline previously warned that if too few employees accepted the offers, the airline would be forced to lay off staff come October.
United initially gave flight attendants until June 18th to apply for leave but extended this until July 15th. With the deadline tomorrow, today’s warning may be the final push to encourage staff to leave voluntarily with benefits rather than risking being laid off later in the year.
According to the Wall Street Journal, the airline has informed staff that official warnings may be issued to thousands of employees in the coming weeks. If United does go ahead with layoffs, it will have to wait until October. The airline accepted a loan under the government CARES act, which prevents it from laying off staff until October 1st. The airline is required to give staff 60 days’ notice, so official warnings could be given out any time from August 2nd.
New quarantine causes booking slump
United also released a caution today regarding its current level of advance bookings. The airline said that new travel restrictions, including mandatory quarantines in some states, have caused a significant drop in bookings. New York announced this week a 14-day isolation period for anyone arriving from a virus hotspot. Consequently, United’s Newark base saw a significant decline in bookings after the announcement.
According to the airline’s internal presentation, bookings for the short-term are at 16% of last year’s levels. The airline announced just last week that it was planning to add 25,000 flights to its August schedule as demand grew. But upon announcing the new flights, the airline said it remained “flexible” as the situation continues to fluctuate. Now, just one week after this hopeful announcement, it seems as if the situation has indeed changed.
Out of United’s control
Although United is looking to add flights to its schedule, it is, like all airlines, at the mercy of international restrictions. On July 1st, the European Union announced that travelers from the US would not be able to visit Europe.
United’s newly announced schedule includes flights to London, Brussels, Frankfurt, Munich, and Zurich. Clearly United is relying on restrictions lifting very soon. If this is the case, then the airline may not need to lay off many, or any, employees. Today’s warning could be a worst-case scenario if the airline cannot increase its schedule as planned over the coming months. At the time of publication, United had not responded to a request for comment.
What do you think of United’s warning today? Should staff be seriously concerned worried, or is United trying to push people into taking its voluntary leave package? Let us know your thoughts in the comments.