Despite "compliance," United prepares to lay off thousands of workers
-
A pilot walks by United Airlines planes as they sit parked at gates at San Francisco International Airport on April 12, 2020 in San Francisco, California. San Francisco International Airport has a seen a huge decline in daily flights since the coronavirus shelter in place. United Airlines, the airport's largest carrier with the most daily flights with 290 flights per day before the start of the COVID-19 pandemic, has reduced their daily flights to 50 per day.
lessPhoto: Justin Sullivan/Getty ImagesA pilot walks by United Airlines planes as they sit parked at gates at San Francisco International Airport on April 12, 2020 in San Francisco, California. San Francisco International Airport has a seen a huge
... more
A pilot walks by United Airlines planes as they sit parked at gates at San Francisco International Airport on April 12, 2020 in San Francisco, California. San Francisco International Airport has a seen a huge decline in daily flights since the coronavirus shelter in place. United Airlines, the airport's largest carrier with the most daily flights with 290 flights per day before the start of the COVID-19 pandemic, has reduced their daily flights to 50 per day.
lessA pilot walks by United Airlines planes as they sit parked at gates at San Francisco International Airport on April 12, 2020 in San Francisco, California. San Francisco International Airport has a seen a huge
... moreDespite government assurances that United Airlines is in compliance with the CARES Act mandate to keep workers employed, the company is considering involuntary furloughs and laying off thousands of employees after the government money runs out at the end of September.
New United Airlines CEO Scott Kirby has been transparent about the challenges facing the airline as it attempts to recover from the crash in air passenger traffic. The airline, San Francisco airport's largest carrier, had 290 daily flights per day before the start of the COVID-19 pandemic. Now around 50 flights leave SFO daily. Nationwide, the airline is flying 10 percent of its pre-pandemic routes. Reuters reported United would only need about 3,000 of the airline's 25,000 flight attendants to work in June.
Advanced bookings for July appear to be on the upswing but that will bring passenger traffic for the airline to about 25 percent capacity.
Confronted with a workforce too large for current consumer demand, United is planning to slash payroll and operating expenses.
The CARES Act federal stimulus bill provided United with $4.95 billion in federal aid but required that the airlines not lay off any employees until October 1st. Kirby has said the airline is burning through 40 million dollars a day and will consider involuntary furloughs and potentially laying off thousands of employees once the CARES Act expires at the end of September.
They are also offering a voluntary separation package for employees that include elite passenger status and frequent flier miles.
MORE: After UCSF doctor's tweets go viral, United Airlines to warn passengers of full flights
Even with the layoff notifications, United States Treasury Secretary Steve Mnuchin said United is in compliance with the terms of the CARE Act while testifying at a Senate Banking Committee hearing on Tuesday, and is not in danger of losing its financial stimulus money.
__________
Online Photo Editor Douglas Zimmerman oversees SFGATE's Instagram and covers the Bay Area soccer scene on SFGATE's Beautiful Blog. View his latest stories and send him news tips at dzimmerman@sfgate.com.