United Airlines, pilots union reach creative deal to limit furloughs

A United Airlines commercial jet takes off from the tarmac as United Airlines announces regional layoffs of its staff due to the coronavirus disease (COVID-19) outbreak, in Arlington, Virginia, U.S., July 15, 2020. REUTERS/Tom Brenner

(Reuters) - United Airlines UAL.O and its pilots' union said on Thursday they had reached an agreement on two different packages aimed at reducing involuntary furloughs in the fall and keeping pilots at the ready once coronavirus-hit demand starts to pick up.

U.S. airlines, grappling with a dramatic industry downturn, have warned that tens of thousands of jobs are on the line in October when a U.S. government bailout runs out.

To minimize the number of forced cuts, large airlines have been offering a variety of early departure packages.

United’s agreement with the Air Line Pilots Association International (ALPA) includes an early retirement deal for pilots 62 and older, as well as a slew of different options for pilots to voluntarily reduce their hours or take a leave of absence during which they would potentially receive health benefits as long as they keep up their training, covered by United.

Bryan Quigley, United’s senior vice president of flight operations, sent the terms to pilots in a memo late Thursday which was reviewed by Reuters.

ALPA Chairman Todd Insler said the deal had “groundbreaking provisions that provide the option (for pilots) to remain qualified, allowing a faster recall once passenger demand returns.”

Airlines are generally reluctant to furlough pilots because of the timely and costly training involved in bringing them back. If a COVID-19 vaccine is developed and demand returns, airlines want to be able to respond quickly.

Airlines had hoped for a recovery before $32 billion in government payroll grants for the aviation industry expire in September. Now unions are lobbying lawmakers to provide another $32 billion through March to prevent tens of thousands of furloughs.

Chicago-based United said last week it was sending notices of potential furloughs to 36,000 U.S.-based front-line employees, or about 45% of staff, including 2,250 pilots.

Reporting by Tracy Rucinski; additional reporting by Juby Babu and Kanishka Singh in Bengaluru; Editing by Robert Birsel