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.
Oscar and Scott
Captain David Bourne
Airline Division International Brotherhood of Teamsters
MEC President, United Airlines Master Executive Council
Association of Flight Attendants – CWA
General Vice President
International Association of Machinists and Aerospace Workers
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.
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.