United Airlines Holdings (UAL 1.24%) late Thursday reached a tentative agreement with its pilots union for voluntary furloughs and early retirement offers, part of the airline's effort to limit layoffs this fall as the industry adjusts schedules based on falling demand.
United earlier in the week sent out notices warning that upwards of 36,000 employees could be furloughed. The airline is hopeful not to need to cut that many people, but carriers are planning for significant layoffs in the months to come as COVID-19 continues to slow travel.
Image source: United Airlines.
The airlines have been operating only a small portion of their 2019 schedules this summer but so far have avoided layoffsl, thanks in part to payroll assistance provided under the CARES Act stimulus plan. Prohibitions on layoffs included in the CARES Act expire on Sept. 30, and the industry is expected to make significant cuts after that date.
The buyouts should lessen the need for involuntary separations, but they are unlikely to be enough to prevent layoffs completely. Todd Insler, chairman of the United chapter of the Air Line Pilots Association, in a memo to pilots said, "we must be prepared for more" beyond the buyouts as the airline pushes toward its goal to be 30% smaller next summer.
In reaching a deal with its pilots union, United follows similar arrangements made by Delta Air Lines, American Airlines Group, and Southwest Airlines to try to avoid involuntary separations.
