Flight attendants at United Airlines have been told to delay non-essential luxury purchases and start sorting out their personal finances as the threat of mass job losses start to emerge on the horizon. While United received around $5 billion in direct government support through the Coronavirus Aid, Relief, and Economic Security (CARES) Act to keep employees in a job, the airline has made no secret that redundancies in the tens of thousands will follow this Fall.
“It should be clear by now that our airline faces serious challenges and that each of us, by our association with our airline, are facing a similar set of dire circumstances,” flight attendants were told in a recent union memo.
“We’ve asked that you focus your attention on getting your personal finances in order and that you exercise caution in all of your financial decision making during the short summer months ahead,” the memo continued.
The CARES Act provides payroll support through September 30 during which time United isn’t permitted to make any of its employees redundant. The Chicago-based airline has, however, warned workers in several departments that mass layoffs will be made as soon as its allowed to do so by law.
United has already told management and administrative staff that their departments will shrink by as much as 30 per cent come October 1, while up to 4,500 pilots might be made redundant unless travel demand picks up significantly over the coming months. Job losses for flight attendants are likely to be 3 to 4 times the number of effected pilots.
Around 20,000 staffers have signed up to take unpaid leave, while United was forced to row back on an attempt to cut the paid working hours for some of its employees. Unions claimed the airline was breaking the terms of the CARES Act and one non-union worker has filed a class-action lawsuit arguing that an attempt to get administrative staff to take 20-days unpaid leave also flouted the payroll support program.
United plans to unveil the details of a voluntary separation scheme at the end of May in a last-ditch attempt to reduce its payroll without making involuntary redundancies. While the details are yet to be revealed, United has warned staffers that this is likely to be the best available offer before the September 30 deadline.
The only other possible lifeline is the prospect of a second federal bailout. Lobbying has already begun in earnest on ‘Phase II’ of the CARES Act.
