United Airlines Imposing Unpaid Time Off, Planning For Huge Layoffs With No Severance

United Airlines is being given billions in subsidies for employee pay on the condition that no employee is furloughed or has their rate of pay reduced.

Already they figured out they could use a CARES Act loophole to reduce full-time employees down to part time. That reduces hours worked, not pay rates. That way there’s more money left over to run the airline and protect shareholders from taking a haircut in bankruptcy.

Now today the airline announced more changes aimed at cutting employee pay without cutting pay rates. They are going to require unpaid vacation days for management and administation employees. This takes a page out of JetBlue’s play book.

JonNYC reports:

JonNYC, whose sources run deep beyond his usual American Airlines leaks, also flags that United rewrote their severance policy so that the management and administrative employees they let go on October 1 (when CARES Act restrictions lift) will receive no severance. That’s huge because the airline plans to notify “at least” 30% of this workforce by mid-July that they’re going to be furloughed October 1.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. When it is all said and done I can’t believe anybody with a brain would want to work for the airlines.

  2. “Ted” will be left of United after these bozo’s get finished with it. AA and DL can split up what’s left and AA can fire (because he did get fired) Kirby all over again! What a sad, sad day for a once great airlines. Pan Am, then TWA and now United. . Ba Bye!

  3. AA is burning nearly 2x the amount of cash per day as UA before this announcement with a worse cash position. AA going to continue to ignore what’s happening until their train goes off the cliff?

  4. They should start with the executive bloat – How many Executive VPs, Senior VPs, VPs, Managing Directors, and Directors these culturally old, monolithic organizations are exceedingly bloated with executive positions.

  5. The bailout was not a bailout for the airlines but for union employees to be paid for 6 months. Airline management should have just fired 99% of employees as soon as it became clear flying is a money loser in this environment.

  6. @Jackson Aimson, the grant was based on 6 months of payroll for ALL airline employees. This is actually the time when you want to get rid of employees directly tied to the operations (since there is limited flying) so no need for so many Flight Attendants, Pilots, Airport and Gate Agents, Mechanics, etc. etc. Most of these jobs, excluding pilots and mechanics, are easily replaceable with several weeks of training.

    Management is still working and trying to figure out ways to keep the Airlines solvent and to attract and retain future talent in Management is going to be hard with zero prospects of pay raises and bonuses on the horizon.

    Unions want a piece of the pie when things are rosy, including billion-dollar mid-contract pay raises. They should also be participating in the pain the Company is feeling. What United is doing is definitely sleazy but that’s the airline’s MO. Remember Dr. Do?

  7. Edit to above – sometimes the fingers hit the ‘Post Comment’ button too quickly.

    They should start with the executive bloat at the airlines – How many Executive VPs, Senior VPs, VPs, Managing Directors, and Directors do these culturally old, monolithic organizations need? They are exceedingly bloated with executive positions.

  8. Are you kidding me? 6 months of getting paid by Uncle Sam with no work to do is plenty enough severance. Isn’t there something more worthy of outrage than entitled union workers losing their jobs? What about the 20m who lost their jobs and didn’t have the benefit of a special carve out?

  9. @bob United also has a ton of short term debt due in 2020 and 2021 AA debt isn’t due till 2022 yes a lot more debts but better position short term

  10. My husband flies for United. With “zero” growth in reservations and $60 million a day in financial bleed, how long do you expect them to be able to sustain this company with the current state of the economy? How would that work in your household? Finally, how many of you who are ditching United have purchased airfare recently? What are you doing to support the airlines?
    As for us, my husband with 26 years of seniority will probably be on the street October 1st. Some of you may say “wah”, but what if that happened to you? We will be flying again the end of July. How about you?

  11. Perhaps I am a contrarian, but I think the guilty party here really is the government bail-out. All the airlines are doing is executing as is mandated in the rules that came with the bail-out. They are flying mostly empty planes around to destinations that do not need the volume or frequency.

    When the bail-out funds are drained, and the rules that come with them do no longer apply, the airlines will have to adjust to whatever reality they find themselves in at that time. It is entirely logical to expect passenger volume to be significantly below to the pre-COVID levels. Let’s assume it is 40%… or 60%… which implies that United and all other airlines have too many planes, too many FA’s, too many pilots and co-pilots, too many check-in agents, too many office workers, etc.

    I think it is entirely acceptable for a business to point out that, with an uncertain future, its employees can and should expect pain to come. Or would you rather they pretend it is all plane sailing (!) and spring downsizing on them “out of the blue”?

  12. My friend, who works in Jetblue, does not have to take unpaid leave as he on H1B visa. Only Permanent resident and Citizens have to take a hit. H1B is protected from layoffs and pay cuts.

  13. Yet shockingly they had enough money to take delivery of several shiny new 787s.

    Truly the worst company.

  14. What many of you here don’t see is that management and administrative employees will receive no severance. Most of you think that’s a good thing, after all it’s an airline and who cares. I ask you, would you or how do you feel about being furloughed especially after working for a company over 30 years to walk away with absolutely nothing? No retirement (taken away after 9/11 through bankruptcy) and no severance? I can tell you the union workers as well as officers of the company (managing director and above) all have contracts protecting them. Those of us between the officers and the union workers have no protection and not just United, but many corporations take advantage of this. Kind of like our politicians, they buy votes of those in the lower income sectors with freebies, and the extremely wealthy have all the money. Those of us in the middle pay all the taxes with no reward. Got to love it, this is America today.
    Management gets 1 to 2 weeks less vacation, pay higher premiums for medical/dental, work longer hours with no additional pay, no shift differentials and don’t make much more than the people they manage. In fact, the very same people they manage can and do make more as they get paid overtime for every minute at work, something management doesn’t.
    United has always been good at taking care of the company officers and unions, but never the front line management.
    United had this motto of treating everyone with dignity and respect and it stops right at front iline management.

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