United Airlines to Put 950 Pilots on Furlough
Tuesday, June 24, 2008
United Airlines said yesterday that it would furlough 950 pilots, or 15 percent of its pilot ranks, in the biggest such reduction since the sweeping industry cutbacks after the Sept. 11, 2001, terrorist attacks.
United, like other U.S. carriers, is fighting to stay profitable in the face of soaring jet fuel prices and a slowing economy. Earlier this month, United announced plans to reduce its flight schedule, ground about 100 fuel-guzzling jets and cut as many as 1,600 white-collar jobs.
In a statement, United said it had to take a "difficult, but necessary step to reduce the number of people we have to run our business."
The layoffs come as travelers face higher fares, added fees and more crowded planes. Yesterday's announcement isn't likely to improve employee morale.
Dave Kelly, spokesman for the United chapter of the Air Line Pilots Association, said the carrier's focus on mergers in past years and a lack of focus on operations have contributed to the airline's current problems.
"It's disappointing any time any of our pilots are furloughed," he said. "Fuel prices are not totally to blame. The company's business plan, or lack thereof, contributed to this decision."
United signaled that other job cuts could be in the works, saying it had begun notifying other union-represented workers about possible layoffs. The airline's unionized workforce includes mechanics, flight attendants, customer service agents and baggage handlers.
A United spokeswoman said the airline would send the first notification to about 100 pilots by mid-July. The furloughs will continue into 2009. The company has about 6,600 pilots. Under the furlough system, pilots could return to the airline if financial conditions improve, in order of seniority.
"There's more to come," said Richard Aboulafia, a Fairfax-based aviation analyst at Teal Group. "The only hopes that airlines have is to cut capacity and cut planes. And if you cut planes, you cut pilots."
United and other carriers furloughed thousands of pilots after the Sept. 11, 2001, attacks nearly brought the nation's air travel system to a standstill. Most pilots were recalled by last summer as the industry returned to financial health.
But it has been battered by a recent spike in jet fuel costs. United, the second-largest U.S. air carrier after American Airlines, reported a $537 million loss in the first three months of the year.
United said this month that it would reduce capacity by as much as 10 percent in the final three months of the year compared with 2007 levels and was planning deeper cuts next year. The airline also said it would dismantle its no-frills jet service called Ted.
United was the first airline to announce a $25 fee for a second checked bag. Many airlines, including United, now charge fees for all checked luggage.
Last week, Continental and United Airlines, which failed to complete talks this spring to become a single carrier, said they would work together in an alliance to boost revenue to offset rising fuel costs. Under the deal, the two airlines will book seats on each other's planes and create joint ventures for overseas flights.
The Air Line Pilots Association, which represents about 55,000 pilots, has complained that airline workers have made billions of dollars in concessions to bring the industry back to health. The union recently said pilots have given up $30 billion in lost wages, work-rules changes and benefit reductions.