United gives employees longer to decide on voluntary furloughs

July 30, 2020

Reuters) - United Airlines (UAL.O) on Wednesday extended a deadline for most employees to decide whether to take voluntary furlough deals to Aug. 10, as it waits to see if the U.S. Congress extends an airline bailout in the first week of August.

United announced the extension in a memo to employees seen by Reuters, adding that it was working with unions, which are lobbying U.S. lawmakers for an extension of the bailout that would prevent voluntary furloughs and delay impact on employees until early 2021.

United confirmed the memo and declined to comment further. Most employees had previously faced a Thursday deadline to decide whether to apply to leave.

“While nothing is certain, our union partners have built a strong campaign to advocate for an extension” of the payroll assistance program, the memo said. “We have worked closely with them to support those efforts.” But the letter added that United is “not counting on Congress passing an extension.”

Chicago-based United said last week more than 6,000 employees had opted for exit packages. But after sending 36,000 notices of potential furloughs this month, that relatively low take-up suggests United might have to furlough a significant number of workers.

On Monday, a majority of the U.S. House of Representatives signed a letter calling for a six-month extension of the $32 billion aviation industry payroll aid program, arguing it is crucial to keeping hundreds of thousands of aviation workers employed.

The payroll program is set to expire Sept. 30.

Congress awarded $25 billion in payroll assistance to U.S. passenger airlines in March, along with $4 billion for cargo carriers and $3 billion for airport contractors. Most bailout funds do not have to be paid back.

Between American Airlines (AAL.O) and United, more than 60,000 frontline workers have received warnings that their jobs are on the line on Oct. 1.

Separately, American has extended a deadline for frontline workers to accept voluntary exit packages to Aug. 5 from July 31, according to a memo seen by Reuters.