On Saturday, I covered United’s latest letter to its customers. Today, I’ll cover its latest later to employees. One thing I admire, even though the bottom line is sobering, is the honesty.
United Warns Of Jobs Cuts This Autumn
You can read the whole letter below, shared with employees on March 27, 2020, but I draw your particular attention to the bolded text below (I’ve bolded it):
To our United Family:
Today, Congress passed an emergency COVID-19 response bill that includes significant financial backing for the airline industry. This decisive, bipartisan action by our elected leaders in Washington, D.C. is good news for our country, our economy, our health care system, our industry, and importantly our family here at United Airlines.
The impact of COVID-19 on demand for air travel has been dramatic and unprecedented – far worse than even the aftermath of 9/11. This federal assistance buys us time to adapt to this new environment and assess how long it will take for our economy to begin to recover. But, what this means for you right now is that United will not conduct involuntary furloughs or pay cuts in the U.S. before September 30th.
Everyone had a role in this effort and, as you always do, you came through for us. While Oscar, Scott, our union leaders and our government affairs and regulatory teams worked around-the-clock, on behalf of all of you, to educate leaders in the federal government about the unique and dramatic impact the COVID-19 outbreak has had on United Airlines, our United Airlines family sprang into action.
Your participation in the last few days was critical. More than 30,000 of you sent more than 100,000 messages to your representatives in Congress and another 5,000 signed a petition for international employees and retirees. Our union leaders also activated their organizations to amplify the message for the good of our company. The speed at which everyone stepped up and acted was remarkable and shows that when we come together, we can accomplish incredible things for our company. Thank you for what you did to help in getting this legislation passed.
We also wanted to pause and thank you for performing at your best to take care of our customers and each other through all of this uncertainty. Our operations teams have literally been on the front lines of this crisis, working directly with our customers and helping them navigate the ever-changing series of schedule adjustments, government mandates and restrictions on places prohibiting travel.
Specifically, our pilots, flight attendants, airport agents, ramp service, technicians and catering teams are showing up at airports all across the country, every day, helping customers and one another, and looking for opportunities to do the right thing. But they’re not the only ones who continue to go the extra mile in these trying times – it should be no surprise that our contact center employees have been particularly tested, handling nearly one million calls in the last two weeks alone. Through it all, they are doing what they do best: being there for our customers and remaining upbeat and positive.
Across the board, we’ve never been prouder of this team and what we stand for but unfortunately our work is just beginning. As we look forward, the lessons of past disruptions like 9/11 tell us that we can’t pretend that we are out of the woods. Things are very different today than they were just four weeks ago.
The global economy has taken a big hit, and we don’t expect travel demand to snap back for some time. Our April schedule is already cut by more than 60% and we expect our load factors to fall into the teens or single digits even with 60% less capacity. We are currently planning to make even deeper cuts in May and June.
And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year. We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority. That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.
Amid these questions about United’s future and this disruption to our daily routines, we feel it’s more important than ever to connect with you. Social distancing makes that challenging, of course, but our team has found a way for us to use technology to host a “virtual town hall” next Thursday, April 2nd, where we can talk more about these challenges and answer your questions. We’ll soon have more details on timing and how you can participate. We hope you will.
We remain in the business of serving people even when there are fewer people traveling. And even in this time of uncertainty, some things are constant: we still have the best airline professionals in the world; we still put our customers at the center of everything we do; we still operate in the best hubs; and we still have a deep-seated culture of caring for one another.
So when travel demand returns – and it will return – we will bounce back and be ready to accelerate towards our goal of becoming the best airline in the history of aviation.
Thank you for all you do.
Oscar and Scott
My Thoughts
As a condition for accepting federal aid, United will not slash any jobs until at least October. But United is all but promising in this letter that it will do so.
Amazingly, United expects loads to be under 20% even with the severe cutbacks already in place and planned for the upcoming months.
Even as United hopes to rebuild once COVID-19 is under control, the process will be slow. It does not expect travel demand to return until next year, even as it hedges its bets by saying it is planning for the worst.
The bottom line is this: United is warning that the bailout will not be enough to actually save jobs, just prolong the pain a bit longer.
CONCLUSION
United’s “thank you” letter to consumers talks about how the bailout “saved” jobs.
This support will save jobs in our business and many others. And it allows us time to make decisions about the future of our airline to ensure that we can offer you the service you deserve and have come to expect as our customers.
Based upon the employee letter, we know that is likely only a half-truth. Jobs will be saved on a temporary basis, but not on a long-term basis if demand does not recover more quickly than now projected.
Sadly, United can hardly be blamed for looking ahead and wondering about payroll with flight schedules greatly reduced and load factors still in the teens. It’s a sad new world. United, to its credit, is at least honest about the ramifications. Employees, you have been put on notice.
image: United
Loads are way less than 20%. My commutes from Florida to ORD have had 10-12 people on 737s. I have flown an E175 with more than 10 people on it.
Forgive me for not understanding the CEO’s language…
Last week I got stuck in Guam (GUM) as United had canceled the onward segment.
By doing a bit of forensic research, I found out that they had issued a boarding pass in San Francisco, while the flight had already been canceled at the time of issuance. (How that is technically even possible it scares me and boggles my mind…)
Not that it matters much (being a Premier 1K member), as I feel UNITED should care about their customers, I was left spending a night sleeping literally on the cold concrete floor of the customs area with no internet etc.. No hotel voucher, no meals, no drinks , no apologies, nothing…
And I had to pay my own way back to San Francisco…
Having lost my 2 bags for 2 days and returning them damaged didn’t help my mood.
So say what??
“We remain in the business of serving people even when there are fewer people traveling. And even in this time of uncertainty, some things are constant: we still have the best airline professionals in the world; we still put our customers at the center of everything we do; we still operate in the best hubs; and we still have a deep-seated culture of caring for one another.”
@ Matthew — Brutal honesty from me — “I really don’t care what United says and in fact did not read the above. I will never fly with them again, unless it is an emergency and I have no choice. Their leaders should have acted like they cared about someone other than themselves before now.”
Please please please do not fly on United. I would hate to sit next to you. I fly United all the time and they do a pretty good job of transporting 160 million people a year all over the world.
Awesome Carlos, as a United homer and/or employee you’ll be all by yourself until they cancel or drag you off
So you didn’t read the article, but still felt the need to “voice your opinion”. Please don’t fly United. Ever.
Please don’t fly United ever again.
Why temporarily save jobs that are going away?
What stupid capitalistic socialism is this?
Last week the number of unemployment claims in the U.S. spiked to over 3 million. While on principle I do not support public bailouts of private companies, imagine how many millions of unemployed there would be in a matter of weeks without a bailout. The bailout is not a solution, it is meant to flatten the unemployment curve to something the economy can better absorb.
Should the government allow companies to fail, or should it print/borrow money to bail them out? Guess that depends if the U.S. can stomach 1/4 of society being suddenly unemployed and angry.
They should be allowed to fail.
Gene, glad to see so much positivity from you. Wishing for job losses….
Best of luck to you. Stay healthy.
I did not say that I wished United would fail or that anyone would lose their job. However, I do believe that businesses should borrow money to get through hard times and then if they cannot get of their hole, file bankruptcy. That is how capitalism is supposed to work. I, as a taxpayer, should not be forced to finance their failed risk-taking or someone else’s poorly-selected student loan for a low-value history or art degree, etc. Overpaid executives and corporate shareholders should be the ones to pay for these corporate failures, not the public. Unfortunately, job losses are inevitable, but that is also part of capitalism and that is what unemployment insurance is for.
Yeah,after the David Dao incident,Donna Beegle incident and the thing where the little doggy died because the callous bitch of an FA made the family put him in the overheads,and the one where the other dog got put on the wrong airplane,let United Airlines wither away and go el foldo
Maybe you should do your research before you call a flight attn a [redacted by admin] for an incident that the media once again falsely reported! AND the Dr Dao incident was a regional carrier operating under the United name!!!
Agreed Deb. Fact check. The woman tried to avoid paying pet fees and placed the dog in a regular travel bag. It’s a FA job to ensure bags are placed in the overhead bin that are too big for underneath the seat; to save EVERYONE’S life in case of an emergency. Dr. Dao took the travel voucher to give up his seat and still wanted to sit in the seat. It was not an United employee. This flight, like all other major carriers, are contracted out from Regional Airlines. Therefore, as demanded, there was no United FA to terminate. By the way, security that pulled him off is Chicago PD.
I hope they fail. I just checked in for my flight to Miami and paid for luggage when it was announced ports were closed and cruise cancelled. Called United they said you have to cancel if you are a no show you dont get your luggage money back
Such disgusting service at a time like this.
Your the problem and not the airline!
I agree let ALL the airlines fail if needed, the reason we have been jammed packed together like sardines and put up with sour flight attendants and staff is the lack of competition!. Let the BIG 3 or 4 FAIL, capitalism works, in their place maybe 8 to 10 Airlines will replace them!. Time to let business decisions be the RESULT OF CUSTOMER input NOT the Opinion of stockholders or business analyst!
That was Pelosi’s idea. Each party agreed to allow certain provisions that the other party wanted.
Pretty stupid idea. But i am sure she put it in because the “capitalists” wanted to just give the money to the airlines with no strings attached.
Pelosi is stupid. Mnuchin is a thief. Pick your poison.
There are strings attached though.
Not so much. A donation to Trump will remove the strings.
Please please please do not fly on United. I would hate to sit next to you. I fly United all the time and they do a pretty good job of transporting 160 million people a year all over the world.
The money is just guaranteed loans. Just like the auto companies got in 2008. They all paid back the money. The banks would not loan to these corporations because there is too much risk. Quite listening to the fake media and research things from reliable sources. Use that thing inside your head called a brain and stop believing the fake news on TV.
Baker!! Yes finally someone with half a brain on this site. Thank you for an intelligent reply.
It is best called welfare. And if your job was one of those that survives until October, you would be very happy. Sometimes people need help. Now is one of those times.
Practically every facet of the American economy has some kind of welfare program. From farmers to oil companies. They like to give the programs clever acronyms, but it is simply welfare.
Why provide healthcare to people who will die eventually anyway?
Unlike the bailout of the auto industry that was a huge success in the end, and was a good investment for tax payers, I am really having trouble seeing the bailout of the airline industry doing the same.
United already saying they will be a smaller airline and will cut their employee numbers after the freeze is pretty much telling the tax payer that we took your money and have little expectation that you will get your investment back. The only thing this is doing is helping Trump keep some hope of lower unemployment numbers during the key period of the run up to the election. Once November rolls around and the dust settles we will start to see the reality. The bailout will mean airlines will become half the size of what they were, fares will dramatically increase, service will be diminished, and the Big Three will coordinate routes to assure higher fares and loads.
This will become a significant loss for taxpayers and, even more so, for consumers over the long run. It will also pad the numbers for Trump over some months so he can appear all rosy, most likely giving him the election. This, in an effort to as Mencken once said, “swath the bitter truth in bandages of soft illusion.” The realities of this bailout will only come to surface next winter – and it’s going to be a bloodbath.
I once worked for a top 100 company in the US. I couldn’t believe the number of people that worked there that I thought were useless. Lazy, bureaucratic and “by the book” people just willing to deliver the basics on a typical 8am to 4pm schedule but never trying to go the extra mile to add more value. But that was only my opinion. Until one day I had an opportunity to grab a coffee with a very high ranked person in the company. During our informal conversation he shared the following frustration with me: “if from tonight to tomorrow morning 20% of our workforce disappear, nobody will notice.” Wow!!!! The problem is that big companies get too big and it makes difficult to “clean the house”. Too many layers, too many functions, too many areas, too many people. I think United is a great example where this crisis will give them the opportunity to “clean the house” and only keep competent people that are willing to go the extra mile.
At the expense of the American taxpayer in what was supposed to be primarily a bailout to preserve jobs and allow them a bridge to recover when the pubic returns to flying.
You are absolutely right, but in the case of airlines, they will hire back according to seniority (where there are supportive union rules in various work groups – I don’t know about other airlines that are not unionized). Seniority, unfortunately, does not necessarily mean talented quality or competence. Will the unions even still be standing? What a conundrum. Glad I retired five years ago but I do feel for the many friends and relatives still working for United.
Santastico you have no idea what you are talking about. And btw everyone here every airline in the world is going through this. What’s the point of picking on United.
@Dave: I think you completely missed my point. I am not picking on United. I am using United as an example since the article was about United. I am talking in general. I am talking about Corporate America. There is simply too many people working in all big companies that should not be there. If you never worked for a big company just ask any friend that does and ask them to name 5 people that they know that they have no clue what they do at the company. These companies are just inflated with functions and people that are just there and fall through the cracks when economy is booming. When things go sour corporations will look much deeper at their workforce and will find people that have no reason to be there.
BTW, I have family members that work on both travel industry and remote communication industry. During this crisis people stopped business travel and replaced face to face meetings with online video conferences. There is a clear view across both industries that when the crisis is over things won’t go back to where they were. Expect a lot of people that used to travel for business to start using more and more online video tools. Expect corporations to realize that lots of the business travel they used to do is unnecessary. People will figure out that a lot of the meetings they did face to face can be done remotely. Thus, expect a lot of business travel to be reduced just because this crisis gave the opportunity for companies to realize that a lot of business travel was just a waste.
@ Dave — Why pick on United? Because they deserve it. In the face of an unprecedented crisis, United wasted no time adopting a policy of ripping off their customers. They showed their true colors and should be boycotted.
Gene I hope you going to loose your job and your house
And what you going to do
Thi is not a bailout is a loan the taxpayer give to business
@SFO Ramper
It’s indeed a bailout. Funded by Taxpayers. And United has already said that it means nothing in the long term after the layoff freeze that is mandated is over. It’s only a loan if it goes as planned. And United was the first to basically say, well, it won’t.
As it appears you are an employee, most likely with UA, it’s you that will most likely and sadly lose everything. Not Gene. Not because the American taxpayer did not try to help. But because Airline executives tricked the Fed to believe that this would be just a bridge to everything going back to the way it was. It won’t. For years. And you as an employee and me as a taxpayer pay in the end. The shareholders and executive team though will be just fine in the long term, in case you were worried.
I’m sorry for what you are going through. Or will be.
Purchased tickets in January to fly to Switzerland in May. United Airlines changed their policy 3 times so far. Government bailed them out.. Still no refund.Hope they treat there employees better than the customers. I got my doubts .
It is definitely disappointing that United will not refund our tickets. We were scheduled from Omaha-San Francisco on April 18 nonstop. They changed the flight to a stop in Denver and a much later arrival time. We had a cruise cancel and they are giving 100 percent of our money back…why can’t United do the same??
i prefer UA’s honesty than DL who is still busy with gaining market share while others are cutting back. Thoroughly ironic that DL isn’t gaining flyer loyalty but more like getting their own small state customers killed faster.
At least DL is honoring their slogan – case curves ? KEEP CLIMBING !
It’s a business that has paid stockholders generously instead of saving money for a rainy day as we consumers should/must do. In the past airlines have gone bankrupt and yet still flown. Money from Uncle Sam now is just printed based on what? Will our currency soon devalue like Venezuala? I don’t anticipate it, but I wish I knew what on earth our $$$ is based on… A shared agreement as to its value, and very few people control who profits.
OK, UAL management sucks. No “Breaking News” there. But, like it or not, Oscar and Co. are actually talking pretty candidly about what UAL AND the rest of the airlines (and much of the travel industry, in general) now face. Let’s say Co-Vid 19 fades way down by August or September. Does anybody really believe customers will be flocking back to planes in huge numbers ? Anyone really think there will be
a crush to get back on the sealed aluminum cigar with 150 or so other people at arm’s length for 4, 6, or 10 hours?? It’s a very long road ahead before we see any kind of normalcy. And that means hard times will linger because airlines not only carry people, but those same planes carry cargo, including food. And if that portion of the transportation system vanishes, recovery will take that much longer. Does every airline deserve bailout cash? Probably not. But the airline industry has become a key part of
our economy. The issue is complicated. And inportant. It deserves study and clear thinking, not
name-calling and death wishes.
Delta Management has been indulging in (somewhat) dishonest statements to employees and the public. Up until March 24 they were bending-over backwards to say there would be no pay cuts. After that, Ed said this:
“I’m asking all ground employees, including merit employees, to reduce their schedule to three- and four- day work weeks from April through June. This will result in a 25 percent savings in payroll over the next 90 days. This is a meaningful contribution to the crisis at hand, and I thank you for making these sacrifices to protect Delta.”
So they aren’t cutting pay, but they’re cutting pay? This is a stealth pay-cut, particularly for the thousands of merit (Delta speak for salaried) employees who labor tirelessly, acting as glue that holds the operation together, and making nowhere near what some of the pilots or flight attendants do.
Delta employees understand cuts must be made – management should just be honest and say salaries must cut by 25% for 3 months and not go through a bunch of administrative measures to obtain that objective.