The message from United Airlines is clear: bail us out or we are going to start laying off massive number of workers.
Earlier today I shared that United Airlines will reduce international service by 95% in April. Domestic service will also be cut back significantly. That leaves huge payroll expenses in place with virtually no incoming revenue, a difficult position even for a company that planned for a rainy day (United did not, spending most of its excess cash on stock buybacks).
In a joint letter signed by outgoing CEO Oscar Munoz and incoming CEO Scott Kirby as well as union leaders representing employees, United warns that it will start mass layoffs absent a government bailout and urges workers to push their elected representatives to pass a relief package.
Here’s the full letter:
To our United family:
We hope you and your loved ones are well.
In these difficult and uncertain times, we want to continue to keep you updated about all the ways we are aggressively managing the impact of the coronavirus (COVID-19) on our company.
Since you last heard from Oscar and Scott on Sunday, companies around the world, especially in the travel industry, have announced painful steps they’ve been forced to take to deal with this crisis. Marriott shuttered a number of properties around the world, furloughing tens of thousands of workers. MGM Resorts also closed facilities and will begin furloughs next week. Scandinavian Airlines announced temporary layoffs for 90% of its staff.
In Sunday’s message, Oscar and Scott were very direct about just how dire this situation has become and what the company is doing to minimize the impact on you, your families and your paycheck.
Importantly, today’s message to all of you is co-signed by many of our labor union partners – and includes a specific request for actions you can take to help.
In recent years, and together with our labor leaders, United has made significant investments in our people and created tens of thousands of high-quality jobs. And we are together now, doing everything possible to protect those jobs.
Earlier this week, we jointly signed a letter to leaders in the federal government calling for bipartisan action by the Administration and the United States Congress to support you, the men and women of United Airlines. Oscar and our partners in organized labor have been front-and-center in Washington D.C. for the past month, leading the charge to educate our representatives about the severe impact COVID-19 has had on our business and all of you.
While many in Washington, D.C. now realize the gravity of this situation, time is running out. The airline has made a number of drastic cuts over the last several weeks to reduce our costs: including slashing capital spending, freezing hiring, cutting payments to contractors and vendors, eliminating all discretionary spending and even cutting our corporate officers’ salary by 50% while reducing Oscar and Scott’s salary to zero.
However, as travel demand continues to plummet, even more cost-cutting measures will be required soon to keep our company afloat. To be specific, if Congress doesn’t act on sufficient government support by the end of March, our company will begin to take the necessary steps to reduce our payroll in line with the 60% schedule reduction we announced for April. May’s schedule is likely to be cut even further.
To that end, it’s time for our representatives to hear from all of you.
Your voice matters – whether you work on the ramp, greet customers in the lobby, take calls in our contact centers, prepare food for passengers, service our planes or fly on our aircraft – and our representatives in government need to understand what’s at stake if they do not act.
Please consider sending a letter or email to your representatives in Washington, D.C. urging them to take quick, bipartisan action to protect airline jobs.
There’s one other important way we’ve enabled you to pitch in and help. Thousands of United employees have applied for a company offered leave of absence – which is an important way to help the company reduce costs.
None of us caused COVID-19. But we continue to be among the most severely affected by the economic impact of this crisis, due to the outbreak’s breathtaking effect on travel demand.
The hard work you do every day matters. And the role you play in the U.S. economy matters. It’s time for the people of United Airlines to put a face on what will happen if the federal government does not act.
Thank you for all you are doing for our customers and each other during this extraordinary time.
In unity,
Oscar and Scott
Captain David Bourne
Director
Airline Division International Brotherhood of TeamstersKen Diaz
MEC President, United Airlines Master Executive Council
Association of Flight Attendants – CWASito Pantoja
General Vice President
International Association of Machinists and Aerospace WorkersCraig Symons
President
Professional Airline Flight Control Association
Taxpayer handouts…the one thing that brings both sides of the table together. Note the urgency in the letter above. Polling shows most Americans do not favor this sort of bailout. United and other airlines are rushing to get through before public outrage grows even more.
CONCLUSION
I remain opposed to corporate bailouts…not until shareholders take a huge haircut. Picking favorites when the whole economy is descending into a pit will lead to resentment and uneven outcomes. It is nice, however, to see United and its labor unions in full agreement over something. I do think all United workers should receive direct aid when job cuts become a necessity.
> Read More: Why I Oppose Bailouts For Airlines, Hotels, And Especially Boeing
Now much did UA spend on stock buyback rather than creating a rainy day fund? Why is it that individuals needs to do that and not corporations? Ah, CEO bonus related to share price and not company health, well UA, sell some stock or the company to better management and raise some cash yourself.
It is time for our Congress to bail out United;
Or we all are going to be out of work very soon.
Hey Melchor, Congress bailed out United and American following 9/11. It is not going to happen9ng to happen again!
Why punish the people for your hatred of the airline? Have the airlines been that bad to you?
*We get you all over the world in hours time
*How safe have we been? The last deadly crash in America was 2009. How many people we carry every day safely….
*Sorry the food sucks
*Sorry you have to pay for bags…oh wait no one on this forum does
*Sorry your miles get you less first class tickets than before
*Sorry we are trained in safety first and our customer service abilities are worse than our ability to get you there safe. I know I stand outside the flight deck, smile and say thank you every flight and care for my customers. I know not all do to the same level.
*Sorry the legroom is EXACTLY what you want to pay for, and nothing more.
I spent $160,000 on my education to make $45,000 first year pay at a regional airline. I am held to the highest standards of all civilian jobs world wide and years later still make less than $65,000 per year. I love my job and we all fought for our lives to get where we are, whether at a regional airline or major.
How is it good for America to layoff 10’s of thousands of pilots and place our air transportation system back 15 years in service. You will not like it when there are no flights to anywhere.
The bailout is fair, airlines have tried their best to become profitable players than can handle downturns in business. We are essential and should almost be more regulated. The public clearly does not understand what we do for them and what the world would be without us.
No one is saying airlines should not be bailed out. We are saying rich people can’t get bailed out
A bail out means you are poor. You should lose all your equity. The employees should take a temporary pay cut. Maybe the government can bail them out in Delaware so they can add usurious terms to the bailout. Republicans are ok with that on my credit cards, aren’t they. Watch these assholes give sweetheart deals to their friends. In 5 years they will be back to pretending they are free market capitalists.
“I spent $160,000 on my education to make $45,000 first year pay at a regional airline. I am held to the highest standards of all civilian jobs world wide and years later still make less than $65,000 per year. I love my job and we all fought for our lives to get where we are, whether at a regional airline or major.”
….. that sounds like your own choice and your own problem. Now your blaming passengers for wanting more out of their increasingly crappy airlines which is ridiculous. Sorry your trained in safety first? Lol. Wether other airlines focus on safety first or not which I’m sure they do and your exaggerating, they still have emergency’s which they handle professionally and with training like any American carrier so that argument is flawed. They also have better service, better seats, and cheaper prices. Across Asia, europe, Africa. Also not having a crash has to do with aircraft maintenance and TSA more then it does you. The plane won’t fly if it’s not deemed to fly and a incompetent pilot wouldn’t be in the cockpit. Again your arguments are flawed.
If airlines want a bailout their going to require to strict guidelines like no stock repurchases and limits to CEO salary and incentives.
You are 100 percent right that PILOTS are integral to our world economy but so is everyone else in the supply chain of delivering passengers anywhere. You speak from a place of a privileged dbag pilot. If instead you framed your argument as me and debit see it. Paying everyone in the supply chain more buy paying your investors less you would actually run a more profitable business LONG TERM wouldn’t you and you wouldn’t have to cry about the people who are making your job even possible (passengers) expecting more from the businesses they frequent especially when there are only so many choices.
Making $65k a year tells me either your a young pilot, you you have little flight hours, your trained on a small plane or you work for a small airline. Ben just did a post on how much an average pilot makes based on the most senior level and if your only making $65k after al this time then maybe you chose the wrong career. I know a girl who became a dental assistant in 9 months and makes 60k a year and she’s 2 years in…. so again all of which sounds like your problem not the people who have to get somewhere for business or leisure, which again I remind makes your job possible.
Ryan, I really am empathetic over your plight, but my opposition to a bailout has nothing to do with my hatred for airlines, especially United, the airline I love:
https://liveandletsfly.boardingarea.com/2016/12/13/love-affair-united-airlines/
Hey, Ryan, the USA got along very well without commercial airlines. We still have buses, trains, and our own cars. In 1966, when nearly all of the commercial airline companies went on strike that summer, military troops were moved by train, as was the case during WW Two. You can keep your nasty and arrogant gate agents, ticket agents, TSA, horrible flight attendants, etc.
Well Ryan, I don’t think I should have to pay for United airlines por choices, I do not get bailed out for my poor choices, I have to live with the consequences!
Let them file bankruptcy!
When an average person encounters circumstances beyond their control, the airline doesn’t come to their aid…. the average person doesn’t get to take billions of dollars from the taxpayers with zero accountability then price gauge and swindle the same people they took the money from.
To us, the rich people say…. that’s capitalism. Well, now we say to the airlines…. sorry, that’s capitalism.
Otherwise, we live in socialism for the rich and large corporations but capitalism for the average people. We’re tired of it.
Bailout is fair? Not if these airline companies who are on the wrong end of customer service has bought back their own stock to enrich the shareholders/employees of the company.
Im sorry to hear how much is spent obtaining a pilot’s license, but at the end of the day every American makes choices on how to spend their money to improve THEMSELVES.
In other words, whats with this new attitude of begging the govt for $$ when life takes a turn you are willfully unprepared for?
Why don’t the airlines go to Warren Buffett he has enough money to bailout the entire airline industry. They don’t because he act like a true capitalists and get the best terms for giving that capital. The racist fake capitalists that call themselves Republicans wil not look out for the best interests of the capital owners. They will look out for future lobbying dollars, future high paying jobs etc. Its just better they aren’t allowed to handle money.
This is a free market. Go raise capital like in a free market. It’s not that there are no places with capital.
I love how the airline employees and others naively act like a billion dollar bailout to any corporation (ie an airline) would somehow trickle down to them. United will lay people off weather they get the money or not. Just like Ford, GM and many of the big banks did in years past.
Direct assistance to airline employees is much preferred to giving money to greedy companies like United!
A little more about me. I am 37, have 20 years flying experience ( got my license at 17) Graduated in 2005 with massive debt and no airline jobs that paid more than $16K so I had to ditch the industry altogether. I worked in retail leadership paid back all my loans and taught flying lessons for several years in the mid 2010’s to get my proficiency back. When I saw the pilot shortage forming I thought it would be a great time to jump into into the industry. I flew aerial mapping missions for a year to round out the flight time and experience. I finished airline training and I have logged 2850 hours. Next time you are on a regional airline peak into the flight deck. If you fly with my company you will see captains in their 50s and 60s many with 15,000 hours of flight time. Getting to mainline is extreme luck. I did get hired by United but have not met the service minimums at my regional yet, I was 6 months away before this happened. Why did I get hired and not some of the incredible captains I have flown with? I have no clue. I am not sure of any other industry that has as an expensive and time consuming point of entry compared to the pay other than maybe nursing. I know everyone has a story and everybody’s job is critical, but there is a difference between what some have to invest into their careers. Also not many businesses run at the cost structure of an airline. Front line employees are not any happier with CEO’s getting big bonus checks than you all are, and that should be addressed in a bail out. I would take a pay cut to keep my job, of course in these times. Sorry to be viewed as a DB (terrible word) pilot. It is difficult to understand or know someone based textural blogs.
Now why again were the Dems against Trump’s initial proposal to temporarily eliminate payroll taxes? Seems like that is the right way to make it less costly for companies to keep their employees, instead of direct cash handouts to favored industries and companies.
Because a payroll tax is massively regressive, and doesn’t really help out the people who need it most #Math
Also, because cutting payroll taxes only makes Social Security and Medicare funding even more dire.
Because if it was obama and a Republican controlled house, they would have put the country on fire just to defeat obama.
Democrats in the house should grow some balls. Treat Republicans the same way they treated Democrats.
Give me some good news, hundreds of republicans dead in red states because they believed trump that this virus was a media hoax.
Ease up on the vitriol. Cheering people getting killed because their political beliefs don’t coincide with yours is too much, even for you.
True. True. Trump hasn’t gone that far in his rallies. Only insinuating for physical harm. Who knows given time he may have gloated on deaths too.
Ok fine, let’s hope none of those Republicans died but they are saddled with so much medical debt now that they have contemplated suicide. How is that?
Actually come to think of it that won’t be such a far fetched thought now that people will lose their jobs and their health care. Hope they continue to refuse to accept any socialist help. Got to keep that spine erect.
Sadly, people that vote have too much pride.i hope they will put that pride away and accept help and evolve their ideology. Their representatives on the other hand are spineless creatures. They will have no compunction throwing their ideology away if it suits them.
@Matthew – Debit is openly calling for people to die of a virus or commit suicide. I realize you enjoy the clicks he brings you, but his hate has gone too far. I don’t understand how you can tolerate his beyond hateful, bigoted speech.
I don’t keep him around for the clicks. If anything, I think he keeps people away, not coming back. I just think the answer to speech is more speech.
In bad times, most people cut expenses and make do with less. Airlines are doing no different.
I’m not arguing for or against loans – I’m merely calling out the fact that in bad times, employees who have no work are burdens.
This will probably cause most of the travel blogosphere to go extinct as well.
Thanks for sharing, Matthew. That letter is a very odd read to me. Where I work, we are funded by the government, and my bosses are explicitly forbidden from ever asking us to lobby anyone in the government on our behalf. Obviously, United Airlines doesn’t have to play by those rules, but it still just strikes me as strange.
Just a single observation from my little corner …
The airlines have made flying an uncomfortable, disgusting chore. NO legroom, high prices, unreasonable charges for baggage, surely employees, non-compliance with FAA safety regulations, stale air recirculation in cabin, etc., etc. And now they want a bailout? They can take their bailout request and fly it up where the sun don’t shine.
The airlines have simply been giving consumers exactly what consumers have been demanding: tickets that cost little more than pocket change. If you don’t like the state of commercial air travel, look around at what the public demands: cheap, cheap, cheap. Now, the airline companies are guilty of many other things, but cramped seats, lack of comfort, surly employees (who are not well paid), all that is driven by the demand for low prices above all. The airlines’ corporate greed is an aggravating factor, but that’s just how corporations behave – there’s nothing special about the airlines in that respect.
Don’t blame airlines management for not planning a rainy fund, because Wall Street vultures will not allow this to happen. Rather the government should set a law which dictate how much cash AND unencumbered assets airlines must keep during normal time.
Another note, I believe that Oscar Munoz should stay as CEO. He can united UA workers better than Scott during this difficult period.
The longer planes are grounded, the longer our economy will contract and suffer. Our government allowed too much consolidation and this is the result – we let it happen. Nonetheless, these companies provide an essential service that drives our economy. We bailed out the banks. We bailed out GM and Ford and Chrysler. Not helping the airlines is merely cutting off our nose to spite our face.
Airlines are critical infrastructure and a national security interest. There’s no way, in my mind, that they won’t get bailed out.
It seems the big 3 airlines have plenty of cash to ride out the storm. They can make payments on their loans or leases for planes, pay rent on their terminal space and pay for maintenance and office operations. This can go on for a year. These airlines are trying not to do temporary mass layoffs of flight attendants, maintenance staff and pilots and are asking for government aid. One way or the other due to the unprecedented government ordered interference in the market (very needed and the right move) the government is going to have to provide assistance to these workers. They can give money to airlines to continue payroll or pay unemployment. With the bad press and sentiment around “bailouts” due to the government ordered shutdown of travel to many parts, airlines may just decide to fire everyone and not take government money with strings attached that will encumber these companies making business decisions going forward.
I suggest the “N” word as in NATIONALIZATION. And don’t tell me that you don’t want the government to run the airlines: are you proud and happy on how the current leadership of the airlines are running them?
I don’t want my hard earned money to bail out “Oscar” and “Scott” and they will be the ones deciding how to invest, or manage that bail out assistance. They might even layoff a bunch of workers. I rather change leadership and ownership and have the government take over vía Nationalization. “Oscar” and “Scott” and the board need to be replaced. Do I think that the government will be perfect? No, but we need to make a change. Things can not stay “business as usual”. We have done this before: 2008 and all those banks and companies are still doing what they want. This time should be different. The world is already different with this pandemic.
Get real. The US carriers are what they are but connect a country. Google national airlines globally and see that it is an industry that needs government help or they will close. It is a business, good or bad. If Americans are happy with their airlines going under, so be it, their choice. What will they be replaced with – – possibly a low cost enterprise with no frequent fliar programme etc etc etc. No flag carriers. Why not, PanAm and TWA were perceived globally as truly American. Take a look, see how globally nations, love or hate their national carriers, so not want to se them go under. Maybe we will see Emirates flying domestically – – how’s that, the new flag carrier of the United States, owned by the government of a Middle East nation.