United Admits Layoffs May Still Be On The Horizon — Just Hours After $29B In Airline Aid Clears Congress

REUTERS/Jessica Rinaldi

Virginia Kruta Associate Editor
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United Airlines CEO Oscar Munoz and president Scott Kirby admitted Friday that even after $29 billion in airline aid passed Congress, layoffs might yet be unavoidable.

The $29 billion in aid came as part of Congress’ phase three coronavirus relief package — and was designed to help the industry, struggling under the weight of travel restrictions, stay afloat until the threat had passed and regular global travel patterns could resume. (RELATED: Most Airlines Could Be Bankrupt Within 3 Months, Aviation Group Warns)

United had told Congress that without help, after being forced to cut some 60% of scheduled flights, the company would be forced to cut back the workforce.

Just after the package passed, Munoz and Kirby sent a letter to employees that was published by Business Insider. In that letter, they promised that employees would neither be furloughed nor let go prior to September — but noted that if travel demands did not recover quickly, layoffs after that point might be unavoidable.

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,” Munoz and Kirby conceded.