United Airlines, citing a “very bleak picture” of continued business declines because of the pandemic’s spread, said Thursday it is considering a furlough for about a third of its pilots.
The warning came in a message to pilots from Bryan Quigley, the airline’s senior vice president of flight operations. Quigley said the airline is considering cutting its number of pilots by 3,900 into 2021, up from 2,250 announced in a cutback plan earlier this month, when United detailed furloughs for almost half its total workforce.
Quigley said that since July 4d, booking trends that had shown some improvement have resumed a steep dive, with the most recent seven-day rolling average registering an 85% revenue decline. “Despite the optimism you may hear, demand has not meaningfully improved, and without very tough decisions, this is simply not sustainable for us,” he said. Quigley added that at the end of the current quarter, United expects “adaily cash burn of about $25 million per day; that’s $2.3 billion in just three months.”
The only alternatives to deeper cuts, he said, are a new round of federal support for the airline industry and an agreement from the Air Line Pilots Association International for more cost cuts, including early retirements. The union had accepted such a package governing the earlier reductions.
“In every contact with our pilots, I have been clear that I do not want to negotiate in public. I am not doing that here and I am not trying to scare you,” Quigley said. “This is simple math and if you are paying attention to the news, you understand that global economic impact is significant.”
Quigley said the industry doesn’t expect passenger demand to return to 50% of pre-COVID-19 levels until a vaccine is developed, a prospect executives think is unlikely until at least late 2021. In the worst case, 3,900 pilot furloughs won’t be enough, he said.
The pilots’ union had no immediate comment on the message.
Support for United under the CARES Act requires payrolls to be held steady through Sept. 30. The Chicago-based carrier plans to begin furloughs Oct. 1 but has joined with aviation unions to lobby Congress for extending aid through at least March of next year.
United has gotten $5 billion in grants and loans under the CARES Act and is in line for $4.5 billion from the Treasury Department secured by warrants for its shares.