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Home » United Airlines » United’s Last Ditch Effort To Secure Second Bailout
United Airlines

United’s Last Ditch Effort To Secure Second Bailout

Matthew Klint Posted onSeptember 19, 2020November 14, 2023 17 Comments

a group of people posing for a photo

With furloughs looming, United Airlines has teamed up with its union counterparts to offer one final plea for a second bailout to Congress and the Administration.

United Airlines Offers Final Plea For Second Bailout

With furloughs less than two weeks away, United shared another note it sent to key political figures yesterday.

The letter is addressed to:

  • Steven Mnuchin, Treasury Secretary
  • Nancy Pelosi, Speaker of the House
  • Kevin McCarthy, House Minority Leader
  • Mitch McConnell, Senate Majority Leader
  • Chuck Schumer, Senate Minority Leader

It is signed by:

  • Scott Kirby, United CEO
  • David Bourne, International Brotherhood of Teamsters
  • Ken Diaz, Association of Flight Attendants
  • Todd Insler, Air Line Pilots Association
  • Sito Pantoja, International Association of Machinists
  • Craig Symons, Professional Airline Flight Control Association

The letter argues for a clean extension of the Payroll Support Program:

“[W]e are joining together to respectfully urge a restart of critical negotiations on Covid-19 legislation to include a clean 6-month extension of the very successful Payroll Support Program (PSP) for airline employees. Without additional funding for the PSP grants, up to 16,000 members of the United family are at risk of involuntary furloughs beginning October 1st. Continuation of this critical program would prevent the furloughs and provide additional time for the industry to reach recovery without losing our colleagues to involuntary furloughs…”

As Live and Let’s Fly has noted, a $25 billion extension would save about 75,000 industry jobs for six months. You do the math. That’s $333,333 per job for only six months.

The note doubles down on the notion that travel will not bounce back until a vaccine is in place:

“In March, we all hoped for a quick recovery from the economic impact of the virus but as we have learned, it is unlikely the aviation industry will see significant return of passengers until a vaccine is widely available to the public and international markets reopen to travel.”

Will six months be enough time or are we merely just kicking the can down the road?

The strongest argument comes in noting the effect of an airline on the larger economy:

“The aviation industry is a critical driver of the larger economy, moving people and goods for business and pleasure; connecting communities of all sizes to the world and supporting good-paying professional careers for hundreds of thousands of Americans. The sooner Congress and the Administration can come together again and reach an agreement, the better United and the entire industry’s chances of keeping employees and returning the economic benefits we provide for the larger economy.”

I’ve often wondered why airlines don’t make this argument more loudly and better try to quantify it.

The final paragraph notes:

“Getting through this crisis will continue to require cooperation and sacrifice from everyone.”

It’s not my intention to kick the hornet’s nest, but such sacrifice is possible if everyone took a payout like at Delta…it just seems many at United who have dealt with past furloughs in their careers are unwilling to give an inch.

You can read the full letter here (.pdf).

CONCLUSION

I still see some sort of extension as unavoidable as we run up to the next presidential election. As to whether this particular letter will move the needle at all, the answer is likely doubtful.

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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17 Comments

  1. ChuckMO Reply
    September 19, 2020 at 6:41 am

    With passing of RBG, the focus just turned to SCOTUS. It’s gonna get ugly and everything else is off the table for the next few months. I fear for the worst.

  2. Chris Reply
    September 19, 2020 at 10:56 am

    The 25B is to be used to pay all airline employees not just the potential involuntary furloughees. Also many employees have taken leaves of absence at a substantial reduction in pay to reduce costs to the airlines and reduce involuntary furloughs.

  3. Dee Reply
    September 19, 2020 at 11:54 am

    What a slighted observation on your part. Many of these employees that were previously furloughed also got their pensions terminated. They took several months of leave with unemployment insurance only paying 30-60% of their normal wages. THAT alone saved thousands of jobs. You wanna tell them again that they haven’t given an inch during this pandemic?

    • Angelo Reply
      September 19, 2020 at 2:12 pm

      Obviously Mr. Klint doesn’t do his homework. Otherwise, he would’ve stated that thousands, and I mean thousands, of United Airlines employees have either taken a leave of absence or an early separation. I being one of those. Many employees have given MORE then an inch. Shame on you Mr. Klint for not recognizing, not only the United employees but ALL airline employees, for the sacrifices many are making.

      • Matthew Klint Reply
        September 19, 2020 at 2:32 pm

        I do recognize the tremendous sacrifice some have made. But I also note that the AFA could have negotiated a deal to protect all FAs and chose to protect its more senior members at the expense of its junior ones. It is what it is. That’s all I was referring to.

        • Rose Reply
          September 20, 2020 at 11:14 pm

          AFA and the Flight Attendants gave a lot to the Company and yet the Company wouldn’t budge. The Company made that decision. WE gave 6 months of more than 15K Flight Attendants taking no pay!!!!!! I wouldn’t blame the Union for the Company’s inability to save or protect these employees. YOU have no clue as you sit there and look from the backseat and pass judgement on my Union.
          And by the way, I am part of that group that my Company didn’t feel was important to save.

  4. D.A. Reply
    September 19, 2020 at 12:09 pm

    Welcome to capitalism Scottie. Kirby might have better luck with other governments who are experts at government bailouts of airlines (e.g . those that Scott claimed just last year were subsidizing the ME3). What a hypocrite IMHO. No government is considering giving my “essential services” company and employees a bailout. That is capitalism.

    • Angel Marrero Reply
      September 19, 2020 at 8:58 pm

      Since when has that changed. No matter what unionionized job, reduction in force is always by seniority. I’m sure that you know that. I was affected by reduction in force in the past at United. I knew that seniority governed who got furloughed, even when I was furloughed.

  5. Yanet Juanes Reply
    September 19, 2020 at 12:09 pm

    United is a great company, I love United but they need to take care moving all the employees Oct 1 was a great move by the company, United be back United is the best we love flying United……and also They have the best employee at MCO Carlos Palacio, he take care my family and my kids on a full flight to Ewr, I was spiking to him and he tell me Oct 1 the company move him to Tampa Florida and I ask him are u happy he said with a big smile I love my job 21 years of service and I go what ever united need me, Carlos will be in Tpa oct 1 and my family and I will flight out of TPA after oct 1 Good luck Carlos

  6. JoEllen Reply
    September 19, 2020 at 12:24 pm

    Why ?…. what did they do with the billions they have already received, spent it all? Paying 100% of staff if you only need 40% of your staff….. to do what, stand around and look at one another while you wait 3-4-5 years for things to get hefty again?
    This government need to give money to landlords who are not getting paid for rents; not huge conglomerations (airlines) that already had billions stashed away.

    • MG Reply
      September 19, 2020 at 2:04 pm

      United Airlines closed Expressjet Airlines Doors 3500 to 4000 employees dont have a job by October 1, 2020. United should stop paying all the top Executive’s you guys make alot of millions like yourself more money in your pocket and you are asking the White House for a bailout that money should be in better used there is alot of people with no jobs

      • G H Reply
        September 19, 2020 at 3:35 pm

        You are absolutely right, I am one of the Express Jet employees who will not have a job on October 1st, and they didn’t care when they chose a cheaper regional to do our jobs.

    • Peter Reply
      September 19, 2020 at 2:32 pm

      What I don’t understand is what makes airline employees so special? Why should the government pay them to stand around and do nothing when they’re not needed? The rest of us in hospitality get leave without pay or termination. Zero from our company. MGM just terminated 18,000 employees. Unemployment is good enough for the rest of us, it should be good enough for the airline employees too. I guess the unions wouldn’t get their membership dues then though, huh…

      • Richard Reply
        September 19, 2020 at 4:13 pm

        I don’t want to say airline employees are special. It would be nice if both parties got back to work and passed a sensible deal for all Americas who are struggling. But with airline employees there are a lot of federal regulations regarding training for most airline jobs . If a pilot doesn’t work for a certain amount of time they lose their qualifications and when they rehired, they have to go through a very lengthy and expensive training program to be qualified again. It makes it harder for the airlines to bounce back quickly if a vaccine or treatment is available. That puts airlines in a unique position. Restaurants and hotels and other areas that are hurting don’t have the training requirements with their employees. Another major issue is smaller towns and airports. It’s not just passengers flying to some of these smaller airports. Airlines carry mail, medical supplies and cargo to these places. But if the airlines are struggling these small towns are the first to suffer. American alone has announced they are pulling out of 15 cities.

        I’m not arguing or lecturing. I certainly understand why people are against airlines receiving aid. But the bottom line is the job market is depressed and tax payers are going to subsidizing these employees one way or the other. At least with bail out money they are staying connected to pay and heath care, and they are paying taxes and boosting economy by spending their income.

  7. AK Reply
    September 19, 2020 at 2:28 pm

    Oh please.

    What government bailout? It’s tax payer money bailout. Or, printed money that hurts the value of earned money bail out. What about all the other industries hurt that didn’t get special money? Are dental hygienists any less essential? Why is there no special, boosted package for them?

    If you need 40% of the staff, you only need 40% of the staff. That’s how it is.

    And no, much of aviation is discretionary. The parts that aren’t discretionary will come back quickly as they make economic sense. Let Adam Smith’s invisible hand do its job and not use the taxpayers’ cash to pick winners and losers.

  8. derek Reply
    September 19, 2020 at 3:04 pm

    I love airlines but this is pork. My income is way, way down. Give me $333,333.

  9. Z. Everett Reply
    September 20, 2020 at 2:23 am

    Scott Kirby is worth 22.7 millions. CEO and top management are not hurting. They get paid millions !!!….
    They are the first ones to be willing to give an inch and sacrifice part of their hefty salaries for a short amount of time.
    Many air crew members, gate agents, ramp personnel have second jobs or have to pick up extra hours to make a living.
    WE AT EXPRESS JET are doomed even if they get a bail out, UNITED simply decided to shut it’s doors to thousands of loyal employees that dedicated decades to the airline.
    There was a 10 year contract between UNITED and EXPRESS JET that was conveniently breached due to the pandemic. Now we are all facing a horrific time of duress.

    STOP ASKING FOR BAIL OUT FROM TAX PAYERS !!…..We all know the funds will not go to the ones that need it. We were never offered a voluntary leave with any kind of pay or benefits. The voluntary leave was unpaid and health insurance was to be paid by the employee out of empty pockets.
    Last but not least, Express Jet CEO Subodh (yes that is his name) is expecting a hefty bonus by the end of September and he encourages his employees to continue to take it up the arse all the way to the end so HE and only HE can get his wind down bonus.

    If there is any funds to be given out is to the people that need it the most.

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