There is no doubt that the Coronavirus has driven a hole straight through the heart of the Aviation and Travel industry. Many airlines are now cutting staff or closing bases as a result of financial difficulty.
With new travel restrictions in place for the US, United plans to scale back the number of flights in August to approximately 25,000. The Coronavirus is currently bearing down on the US with daily infections reaching new highs.
So, what are the plans?
The airline plans to fly at a capacity of 35% compared to August last year. However, scaling back on flights is not going to help save the airline. United has announced that it plans to send furlough notifications to many of its staff. These notifications are required under the federal Worker Adjustment and Retraining Notification Act (WARN Act). As many as 2,500 pilots and over 8,000 flight attendants are expected to receive such notifications.
Under the CARES Act, the airline is unable to release staff until the employment protections have ended on 30th September. This was a condition of receiving government financial aid earlier in the year.
Emergency measures have been put in place to reduce cash expenditure. This includes voluntary leave and early retirement programs. Although this would reduce the number of outgoing finances, even if the majority of staff took voluntary leave, it would still leave the airline far from their required target.
Both pilot and flight attendant unions have requested that the US government extends the furlough scheme. However, they have not succeeded as of yet.
Due to the current state of affairs, it seems that United could be in trouble for some time. Analysts have predicted it could take until summer 2021 to mimic a similar performance of summer 2019.
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