United says it could lay off more than half of its employees if it doesn’t get help from the government as the coronavirus ravages the world’s airlines

  • United Airlines said on Friday that without financial assistance from the government, it would be forced to “reduce our payroll” up to 60%, suggesting layoffs or furloughs were possible.
  • United and other airlines have been severely impacted by the novel coronavirus outbreak.
  • US airlines have requested a nearly $US60 billion bailout from the federal government – the White House has proposed $US50 billion in loans – but have faced backlash over cash spent on stock buybacks throughout the 2010s.
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United Airlines said on Friday it could lay off or furlough workers in the coming weeks if the federal government fails to finalise a bail out for the US airline sector by the end of March.

As the novel coronavirus outbreak has caused global travel demand to plummet, the airline previously announced that it would cut about 60% of its schedule for April, while offering voluntary unpaid leaves for employees.

In a public letter to employees signed jointly by United CEO Oscar Munoz and President Scott Kirby, along with the airlines’ labour leaders, the airline said without assistance from the government, the airline would be forced to “reduce our payroll in line with the 60% schedule reduction.”

“May’s schedule is likely to be cut even further,” the statement continued.

The letter did not explicitly state that there would be layoffs or furloughs. United previously outlined cost-cutting measures, including grounding planes, reducing corporate officer salaries, freezing hiring, and pausing capital spending.

While the fiscal situation for the world’s airlines has rapidly deteriorated, Friday’s statement was the most dire and immediate warning of job cuts to date.

The White House has proposed a $US50 billion aid package for airlines in the form of secured loans, part of a larger $US1 trillion financial rescue. Airlines had previously requested a nearly $US60 billion package, comprised of $US29 billion in grants and $US29 billion in loans.

However, the proposal – and the request from the airlines – has drawn backlash from opponents who point out that airlines collectively have spent significant amounts of cash in recent years on share buybacks, effectively increasing their stock value for shareholders rather than offering more money to employees or saving cash for a downturn.

“One of the reasons, let’s not forget, that many airlines are so short of cash right now is they spent billions on stock buybacks – money they had to send out when they should have been saving it for a rainy day, for their workers and customers,” Senate Minority Leader Chuck Schumer said on the Senate floor Wednesday. “That issue should be addressed.”

President Donald Trump said in a press conference earlier on Friday that he was in favour of prohibiting stock buybacks as part of a rescue package.

However, with cash flow severely in the red, airlines have suggested that continuing to pay employees and cut expenses only through executive salary cuts and voluntary leaves will not be possible.

The United letter calls on employees to contact their Congressional representatives, “urging them to take quick, bipartisan action to protect airline jobs.”