United Airlines CEO Scott Kirby is already warning furloughed employees that United will recall them on a “temporary” basis then furlough them again in March. Demand won’t recover before then and their services are simply not needed. So why exactly are US taxpayers bailing out airlines again instead of providing unemployment benefits and job re-training to the furloughed employees?
United Airlines Will Recall Furloughed Workers….With A Warning
Here’s a snippet of the letter, sent to Live and Let’s Fly by several employees and signed by Kirby and United President Brett Hart:
So what does this mean for us? Well, to start, it means United intends to offer temporary employment to thousands of our team members who were impacted on September 30.
As you know, involuntary furloughs were always a last resort for us and we worked really hard over the summer – through cost-cutting, capital-raising, and partnering with our unions – to make the number of people who were ultimately impacted as small as possible.
Now, those employees who are eligible under the terms of the PSP extension can temporarily come back to United through March 2021. This is certainly good news for our economy, our industry, and our airline – but it’s especially good news for those who have been without a paycheck, and we can’t wait to welcome them back.
Importantly, though, we don’t expect customer demand to change much between now and the end of the first quarter of 2021. United has been realistic about our outlook throughout the crisis, and we’ve tried to give you an honest assessment every step of the way. The truth is, we just don’t see anything in the data that shows a huge difference in bookings over the next few months. That is why we expect the recall will be temporary.
But as we’ve said before, we do see the light at the end of the tunnel. The recent vaccine developments have been nothing short of extraordinary. And we’re so proud of our team for playing an important role in the global distribution of those treatments. But even though vaccinations have started and there are millions of doses being distributed around the country, we’re still months and months away from the majority of the population getting vaccinated.
Kirby’s new nickname should be “Debbie Downer.” When making the media rounds begging for a bailout in order to bring employees back, he never mentioned that an extension to the CARES Act would result in another round of furloughs. Instead, he talked about “keeping all employees” on the payroll:
“What happens is all this critical infrastructure in the United States for airlines and for other degrades. And when the vaccines are out and when it’s time to start the recovery it’s going to take longer for airlines and others to support that recovery. And that recovery won’t be a robust if we don’t keep all the employees here.”
So what is it? We need all the employees here in order to ride the wave of the recovery or what he told employees, that the recalls are actually not needed during this time.
He also added on CNN:
“We’ve done enough; we feel pretty confident to get through. We do see the light at the end of the tunnel because of the great news on the vaccine. I don’t think there will be more furloughs coming forward.”
But I guess he was just already angling for a third bailout and will indeed furlough employees who will now come back at a price of $468,750 per worker for four months.
I’ve praised Kirby throughout the pandemic for being realistic, but April is still a long way away…certainly this year has shown us that. While it is important not to build false-expectations, I read his note to say that the employees who will now be recalled are simply not needed. That is hardly a morale booster, is it? At this point, I’m not even sure it is the bitter truth.
CONCLUSION
Furloughed airline workers are coming back…for a few months. For many of these workers, this is probably good news and better than nothing. However, in terms effective use of taxpayer money and in terms of what United really needs, this all seems like a fool’s errand…
image: United Airlines
I’m an airline industry employee and a huge supporter of commercial aviation in general, but I couldn’t agree more with your last paragraph. The demand is just not there and likely will not be there for at least a year. This aid to the airlines just doesn’t make sense. The industry will be smaller for a while and will need fewer employees. Leading them along like this does no one any good and damages their chances of finding gainful employment elsewhere. There were, in my opinion, much better uses of this money, and I say that as someone whose work group lost 30% of its employees.
What irks me the most is that this will become nothing more than a paid vacation for many over three months. And, as Kirby points out, of course there will be furloughs yet again after. They should be forced to work at something. Stick them at cargo centers helping to move the vaccine. Set up Covid testing at airports and staff them with furloughed employees. Encourage volunteer work that can be done in lieu of the little flying or work they will do. Set up online seminars and programs that are mandatory to virtually attend so as to increase training in their jobs or to potentially retain them for other areas in the company that might be needed. ANYTHING. But to just hand them all a big fat pay check to sit around do NOTHING is so beyond words to me.
You mean like Emirates asking their flight attendants to work for free?
How would these furloughed employees be working for free? We are paying them for three months. Work. Simple. Even if that means doing community service.
Stuart, are you suggesting that ALL who receive government hand-outs should work for it, or only airline employees ??
How much sense is it to pay former employees? In addition to paying ppl who “will remain separated”, Hawaiian air only recalled other employees who were involuntarily furloughed. The ones who voluntarily furloughed are still out.
From: PeopleRelationsManager
>> Date: January 19, 2021
Subject: Notice of Payment and Reinstatement of Benefits
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>> January 19, 2021
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>> VIA PERSONAL EMAIL
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>> RE: Notice of Payment and Reinstatement of Benefits
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>> Aloha —
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>> We are grateful that Congress has extended the federal Payroll Support Program (PSP), which now enables us to provide a lump-sum payment and reinstate your benefits as of December 1, 2020. There is no action you need to take, and this benefit will last for the duration of the PSP period, which is from December 1, 2020 to March 31, 2021.
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>> Here are the key points for you to be aware of:
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>> • Eligibility: If your position was eliminated in August 2020, you will receive a lump-sum payment that will represent your pay from December 1, 2020 until March 31, 2021. You will remain separated from the company.
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>> • Payment:
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>> You will receive your lump-sum payment on February 5, 2021 using your pay rate prior to termination (October 19, 2020). Your payment will be offset by any severance payments received exceeding 6 weeks. Severance payments of 6 weeks or less will not be factored. You will receive your lump-sum payment through the same means that you received your paychecks prior to your involuntary separation (as previously elected in UltiPro). If you elected to receive your payments as a direct deposit, your lump-sum payment will be deposited
You want to know how really crazy this bailout is. I am a UA employee. A couple of months ago UA closed 3 international FA domiciles in NRT,HKG and FRA, those that could not work in the US were terminated on OCT 01. Now with Cares act 2 , UA plans to bring them back even with no base to work out of and pay them to sit at home. How is sending US tax dollars to foreign nationals outside the US “stimulating” the US economy and/or helping UA ? This is insane!
The renewed funding would be only for US-based employees who were involuntarily furloughed. It does not impact the now-closed non-US FA bases. The law (soon to be passed) is specific about this.
check with AFA B4 you post
It’s clearly time for a UBI. No need to discriminate per industry.
Matthew, your experience on the Hill tells you everything you need to know – this “CARES Light,” or maybe “CARES Less,” is just a stopgap until the Biden Administration… But of course McConnell will stonewall.
“Kirby’s new nickname should be “Debbie Downer.” When making the media rounds begging for a bailout in order to bring employees back, he never mentioned that an extension to the CARES Act would result in another round of furloughs. Instead, he talked about “keeping all employees” on the payroll”…
I disagree with you and don’t feel he is a downer at all. I’m no fan of Kirby (though I am starting to warm up) but at least he has been up front all along about the reality of things and the time lines United estimates, which aren’t too terrific. Good for him that he will have the returned furloughed employees as “temporary” and all the psychobabel contract wording that will imply. I’m sure this terminology will make it easier for United to let people go without all the union screaming when the next furlough takes place in April 2021.- He’s not a stupid man ….. and for the love of all that’s holy, I hope the government will not give a 3rd bail-out.
This is nothing more than the airlines becoming unemployment offices while employees reap all the other airline employment benefits (health, medical, travel).
…oh and a full $salary. Yikes.
FYI they have already been advised they are returning