United Airlines to Cut 16,000 Jobs When U.S. Aid Runs Out

United Airlines, still hammered by the pandemic, is cutting 16,370 jobs when government aid runs out Oct. 1.
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United Airlines,  (UAL) - Get Report still hammered by the pandemic, is cutting 16,370 jobs when government aid runs out Oct. 1.

The Chicago carrier, and the travel industry more broadly, continues to get hammered by the coronavirus pandemic, which is keeping would-be travelers at home.

Already, 7,400 United workers have taken voluntary buyouts, and 20,000 are on temporary leave. The airline has 88,000 employees. It warned last month that 36,000 jobs were at risk once government aid expires.

The cuts unveiled Wednesday include 2,850 pilots, 6,920 flight attendants, 2,010 mechanics and 1,400 management and administrative workers. United's schedule has shrunk 63% for September from a year earlier.

United’s competitors are dropping workers too. American Airlines  (AAL) - Get Report said last week that it would jettison 19,000 workers unless government aid is continued.

Earlier this week, United decided to drop its ticket-change fee, leading its competitors to do the same. United will no longer levy the $200 change fee it charges to switch domestic flights.

And beginning next year customers can fly standby for free if seats are available on the same days as their previously booked flights.

Morningstar analyst Burkett Huey says United shares have room to rise.

“We are maintaining our $40.50 fair-value estimate for the firm, and we think the worst days for U.S.-based airlines have already passed, as the U.S. Transportation Security Administration throughput has remained at roughly 26.5% of 2019 levels in July (versus 6% of 2019 in April), despite increasing virus cases,” he wrote in a July report.

United shares recently traded at $36.17, up 0.4%. They have dropped 59% year to date.