United and Other Airlines Consider Layoffs

Staff Report | DFW Newsflash | July 2020

Like many other industries, the airline industry is in peril due to the international COVID-19 crisis.

United Airlines, along with competitors American Airlines and Delta Air Lines, are considering massive layoffs of their employees due to the reduction in travel caused by the various quarantine and “stay-at-home” orders across the nation.

In a meeting on Wednesday, July 8, 36,000 United Airlines employees were given advanced warning of possible furloughs. Though an unnamed senior executive quoted by ‘The Wall Street Journal’ as saying that the furloughs would be a “last resort,” the 1988 Worker Adjustment and Retraining Notification (WARN) Act requiring businesses to give employees a 60-day notice of mass layoffs appears to be the driving factor behind United’s decision to broach the topic at a number of employee town hall meetings. The warning covers about 45 percent of United’s domestic workforce.

United noted that domestic travel revenue is down 78 percent and international revenue is down 87 percent.

Despite tens of billions of dollars in federal aid from the CARES Act, the airlines are merely staying afloat and can only hope conditions improve before Sept. 30 when those resources expire. Airline travel is beginning to rebound, yet industry insiders fear the rebound will not be strong enough, nor will come quickly enough for their employees to remain unscathed.

As airline stocks lag, states face surges in Coronavirus numbers, and business shutdowns cause decreases in both corporate travel and disposable income for would-be leisure travelers, the prospect of avoiding layoffs is dicey.