United Airlines Inc on Wednesday said that it plans to furlough 16,370 employees next month, a smaller number than the airline predicted in July because thousands of workers agreed to leave with the travel industry facing a slow recovery from the pandemic.
Airline officials had outlined 36,000 potential furloughs in July. Since then, thousands of workers took early retirement, buyouts, or long-term leaves of absence.
United officials said the forced job cuts would begin on Oct. 1, when a prohibition on furloughs ends.
Photo: AFP
They said the furloughs would be postponed if Washington approves another US$25 billion to help passenger airlines cover payroll costs.
Flight attendants would bear the brunt of the cuts, with 6,920 getting furlough notices. About 2,850 pilots, 2,260 airport-based employees, 2,010 maintenance workers, and 1,400 management and support staff would also lose their jobs.
The figures do not include the 7,400 employees who took buyouts or early retirement. Up to 20,000 more accepted reduced work schedules or took voluntary leaves lasting up to 13 months.
Most union employees in the airline industry whose jobs are cut have rehiring rights — management and administrative staff generally do not. United began the year with 96,000 employees, 84 percent of whom were represented by unions.
The flight attendants’ union said United’s announcement understates the job losses. The union said more than 15,000 flight attendants would leave the United payroll unless Washington approves more payroll aid for airlines, and another 3,400 who stay to keep health insurance would get no guarantee of work or income.
“Where will we go? The unemployment line,” Association of Flight Attendants president Sara Nelson said. “The situation in the airline industry is not better than July when furlough notices went out. It’s actually worse.”
United officials said they were still discussing ways to limit pilot furloughs. Airlines are cautious about furloughing too many pilots because federal requirements for ongoing training mean it takes longer to bring them back.
United’s disclosure comes after American Airlines Inc said it expects to furlough or lay off 19,000 workers starting next month, and Delta Air Lines Inc told nearly 2,000 pilots that they could be furloughed.
Airlines do not need all their workers because air travel has plunged during the pandemic. Even with a modest recovery since April, US air travel is down about 70 percent from a year ago, costing the airlines billions in revenue.
The airlines have cut schedules — United’s schedule this month is only 37 percent of its schedule in September last year — slashed expenses and borrowed billions of US dollars to survive the pandemic.
United senior vice president Josh Earnest said that the airline does not expect travel to return to normal until a vaccine for COVID-19 is widely available, and that the recovery is likely to be uneven.
The airline expects to recall furloughed workers piecemeal, he said.
“We don’t have to snap everybody back at the same time,” he told reporters. “We can basically build our workforce as we need it, and as our schedule grows and as demand recovers.”
Airlines that accepted federal aid to cover payrolls have been barred from furloughing or laying off workers since March.
United took US$5 billion in payroll cash and loans.
United and other airlines and their unions are lobbying for another round of payroll support that would run through March next year, but the proposal is in limbo because of stalled negotiations between the White House and congressional Democrats over another large virus-relief measure.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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