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United Airlines Plans to Furlough 36,000 Employees in October Due to Covid-19 Crisis

File photo of United Airlines passenger jets taxi at Newark Liberty International Airport, New Jersey. (Image Source: Reuters)

File photo of United Airlines passenger jets taxi at Newark Liberty International Airport, New Jersey. (Image Source: Reuters)

United Airlines further said that job losses could be reduced if enough employees accept buyouts or early retirement by a deadline next week.

  • PTI Chicago
  • Last Updated: July 11, 2020, 5:33 PM IST
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United Airlines is warning 36,000 employees, nearly half its U.S. staff, they could be furloughed in October, the clearest signal yet of how deeply the virus pandemic is hurting the airline industry. The outlook for a recovery in the airline industry has dimmed in just the past two weeks, as infection rates rise in much of the U.S. and some states impose new quarantine requirements on travellers.

Airlines say they must shrink to match falling travel demand. American Airlines executives have said they could have 20,000 more employees than the airline will need this fall. United told employees Wednesday that not everyone who gets a layoff notice will be furloughed. The company said job losses could be reduced if enough employees accept buyouts or early retirement by a deadline next week.

The buyouts come at a price too, however. United said it would take a $300 million charges in the second quarter to cover voluntary departures so far. The company said it was unable to estimate the cost of workforce reductions for the rest of the year.

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If every U.S. airline matched United's worst-case scenario of furloughs, it could be extrapolated to about 240,000 lost jobs nationwide, given United's share of the domestic market. Helane Becker, an analyst for Cowen, predicted Wednesday that U.S. airlines will end 2020 with 150,000 to 200,000 fewer employees than they had at the end of 2019 — much bigger losses than she expected back in April.

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