United Airlines Reaches Deal to Avoid Pilot Furloughs

Last month, United Airlines said that it would have to cut 3,000 pilots and furlough 2,850. It has now reached a deal to avoid the furloughs.
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United Airlines UAL and a union have reached a deal to avoid the furloughs of 2,850 of the Chicago carrier's 13,000 pilots.

The labor agreement comes less than a month after United said it planned to furlough or lay off about 16,000 employees, including 2,850 pilots, starting Oct. 1, when its federal coronavirus relief loan runs out. 

“Any potential mitigation must achieve our goals: stop planned furloughs, stop displacements, and include long-term permanent gains for any short-term, fully recoverable modifications,” Todd Insler, chairman of the United Airlines chapter of the Air Line Pilots Association, said in a note to union members that was reviewed by CNBC. 

The union and United Airlines did not provide specifics of the agreements or the cost. 

Southwest  (LUV) - Get Report, Spirit  (SAVE) - Get Report and JetBlue  (JBLU) - Get Report have already reached agreements with their pilots to avoid furloughs. 

United Airlines shares at last check were off 3.6% to $35.93 after the airline earlier in the day reduced its third-quarter scheduled capacity.

The company now expects third-quarter passenger revenue to fall about 85% from the year-earlier period, United Air said in a Securities and Exchange Commission filing. That compares with its previous guidance of an 83% decline.

In the two weeks ended Sept. 7, United said, the carrier saw "moderate improvement in bookings for leisure travel” for domestic routes and some short-haul destinations in Latin America and the Caribbean.

But it doesn’t “expect the recovery from covid-19 to follow a linear path,” United said. “As such, the company’s actual flown capacity may differ materially from its currently scheduled capacity.”