United Airlines May Layoff Half Of Its Employees On October 1, 2020

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United Airlines, according to the WSJ, is considering laying off close half of its employees (36,000) on October 1, 2020, once the government-subsidized payroll protection runs out.

The airline is still burning $40M per day ($1B+ per month) and is trying to reduce the employee numbers by using voluntary buyout programs first.

Here’s an excerpt from the WSJ (access their piece here):

United Airlines Holdings Inc. said it could be forced to shed almost half its U.S. workforce, telling 36,000 employees on Wednesday that they could be furloughed from Oct. 1 because of the pandemic-driven slump in passenger demand.

Chicago-based United is the first major U.S. carrier to detail possible mass furloughs despite the billions of dollars in federal aid provided to airlines that covered payrolls through September.

The airline said those receiving mandatory WARN notices of potential furloughs include 15,000 flight attendants, 2,250 pilots and 11,000 customer service staff. Employees would be rehired when demand recovers.

Conclusion

The layoffs in the aviation sector in the US will be brutal once the payroll protection runs out on October 1st. It is unrealistic to expect businesses, such as airlines, to keep people on payroll that they don’t need for years.

It will take three to five years, based on the current trajectories, for the aviation sector to reach the same level of activity as just six months ago in December 2019.

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