United Airlines (UAL) - Get Report shares fell Thursday after the airline reportedly told its pilots that nearly a third, or 3,900, of them may be furloughed, as bookings have stagnated amid the recent coronavirus spike.
“In recent weeks, bookings have stalled, and we continue to see an impact of the recent increase in covid-19 cases on our business,” Bryan Quigley, senior vice president of flight operations, wrote in a memo Thursday to the Chicago carrier's pilots obtained by Bloomberg.
United Airlines shares recently traded at $31.71, down 2.6%. The stock has dropped 64% in 2020 to date.
United has 11,675 active pilots. It already planned to furlough 2,250 of them this year. Now the total appears set to jump.
“Because covid-19 cases continue, and demand improvement remains very slow, we may need to furlough more pilots in 2020, and in 2021, than originally planned,” Quigley wrote.
Under the terms of a U.S. government bailout, United and other airlines must keep all their employees through Sept. 30, but then all bets are off.
United earlier this month informed 36,000 staffers, or more than one-third of its total, that they may be cut. It also said revenue will likely stagnate at about half of prepandemic levels absent a vaccine.
United Airlines earlier this month said that it reached an agreement with the Air Line Pilots Association International that "will offer pilots a variety of voluntary separation and reduced staffing options to consider as we continue to manage the unprecedented impact the pandemic is having on the airline industry."