United Airlines (UAL) - Get United Airlines Holdings, Inc. Report and its pilots reached an agreement that canceled 2,850 furloughs that had been scheduled for this week, the pilots' union said Monday.
Shares of the Chicago airline at last check were up 5.5% to $36.07.
The Air Line Pilots Association said it voted to approve the Pandemic Recovery Letter of Agreement with United Airlines management. The accord prevents any United pilot from being furloughed at least until June.
The agreement keeps all 13,000 United pilots employed.
The deal also offers a second round of early-separation options for all pilots age 50+ with 10 years of experience. And it reduces or terminates the effect of temporary work reductions based on a recovery in passenger demand or other market factors, the union said.
The agreement was ratified by about 58% of the pilots who voted on it.
“Our members understood that in order to protect pilot jobs, we needed to approve this agreement,” Capt. Todd Insler, United ALPA Master Executive Council chairman, said in a statement.
“We’re spreading the existing flying among our pilot group while locking in permanent contractual gains. I am proud of our pilots for showing the unity and resolve needed in the face of uncertainty.”
Airlines have been hit hard by the coronavirus pandemic shutdown. Air travel demand is down 70% from last year, according to the industry group Airlines for America.
United executives do not expect travel to fully recover until a covid-19 vaccine is widely available.
On Monday, American Airlines (AAL) - Get American Airlines Group, Inc. Report Chief Executive Doug Parker said he was “confident” the federal government would extend the industry’s $25 billion bailout, so airlines wouldn't have to cut tens of thousands of workers starting Oct. 1.
The Coronavirus Aid, Relief and Economic Security, or Cares, Act provided $25 billion in direct payroll support to the airlines so they could keep paying their employees through the end of September.