United Airlines plans to slash 15,000 airport workers’ hours to part-time, the latest cost-cutting move for the airline amid a dramatic decline in demand for travel during the COVID-19 pandemic.
Full-time baggage handlers, customer service agents and reservations agents will go from working 40 hours a week to 30 starting May 24, said Greg Hart, United’s executive vice president and chief operations officer, in a letter to employees Friday.
Michael Klemm, president of the International Association of Machinists and Aerospace Workers District 141, said the union believes the airline’s move violates terms of its agreement with the federal government giving United $5 billion in financial assistance to keep workers on the payroll.
“The IAM is considering all legal options, including a lawsuit against United to stop this action and protect our membership,” Klemm said in a letter to members, calling the airline’s decision “cruel and selfish.”
The union represents about 27,000 United employees. Delta Air Lines and JetBlue also reduced work hours, according to the union.
United and other airlines that accepted federal funds, part of the $2.2 trillion coronavirus relief package, agreed to hold off on making involuntary layoffs or pay rate cuts through Sept. 30. But it doesn’t keep airlines from cutting payroll costs by reducing work hours, according to United spokeswoman Leslie Scott.
Hart said in the letter that the union’s contract would have allowed the airline to cut employees to 20 hours per week and that the airline made the decision after failing to negotiate “a consensual, more favorable agreement” with the union’s leadership.
“This was a very difficult decision and one we didn’t take lightly,” he said.
United employees aren’t the only airline workers facing fewer hours and reduced pay as the industry slashes costs amid a collapse in demand for flights. Passenger numbers at U.S. airports are down roughly 95% from the same period last year, according to the Transportation Security Administration. United has slashed about 90% of its flying capacity in May and expects to operate a similar schedule in June.
With so few people flying, “tens of thousands” of employees are facing reductions in hours and, therefore, take-home pay, United president Scott Kirby said during a call with analysts Friday.
Hart’s letter said the airline is planning to announce similar changes for management personnel on Monday, and more than 20,000 employees have already taken voluntary unpaid leave or separation options. Kirby and CEO Oscar Munoz won’t receive their base salary through at least June 30 and corporate officers’ base salaries have been cut by half.
The $5 billion aid package gives United time to see whether demand for travel starts to recover by fall, but if it doesn’t, layoffs could follow in October, executives said.
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