United, American, Hawaiian warn of job losses in early 2Q21

Airlines in the United States have issued fresh warnings of job losses once the second round of payroll support expires on April 1. United Airlines (UA, Chicago O’Hare) said it had sent warnings of potential furloughs to about 14,000 employees, American Airlines (AA, Dallas/Fort Worth) to about 13,000 employees, the carriers revealed in separate disclosures. United had recalled 13,000 employees from furlough when the previous payroll package was passed in December, but “despite ongoing efforts to distribute vaccines, customer demand has not changed much since we recalled those employees,” it admitted in a letter to employees. However, it added that it was monitoring demand and was strongly advocating continued government support. American Airlines blamed what it called slow vaccine rollouts and new international travel restrictions. It furloughed 19,000 staff when the last round of payroll support ended on October 1, recalling them in December. “We are five weeks into 2021, and unfortunately we find ourselves in a situation similar to much of 2020,” chief executive Doug Parker and president Robert Isom said in their note to employees. “The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative Covid-19 test have dampened demand.” Delta Air Lines (DL, Atlanta Hartsfield Jackson) and Southwest Airlines (WN, Dallas Love Field) have mostly averted layoffs due to voluntary leave programmes. American and United also offered such deals but had still been forced to furlough. The latter two have now launched new rounds of exit packages. Meanwhile, Hawaiian Airlines (HA, Honolulu) has filed a WARN – Worker Adjustment and Retraining Act – notice with the state Department of Labor and Industrial Relations in Honolulu, saying it may have to lay off 810 employees, including 647 cabin crew and 99 pilots (from April 1) and other positions such as customer service agents, ramp agents, and flight dispatchers (from June 1). Most affected positions would be at Honolulu, with others at Hilo, Kahului, Kona, and Lihue airports. While it has seen “a modest increase in travel to our islands since the rollout of Hawaii’s pre-travel testing program and nationwide administration of Covid-19 vaccines, the pandemic continues to negatively affect Hawaiian Airlines,” it said in a statement. In January, United Airlines said it planned to cut around USD2 billion in costs per year until 2023, inclusive. A rebound will largely depend on the pace of the vaccine rollouts, it added, branding 2021 a “transition year that’s focused on preparing for a recovery.” United burned an average of USD33 million a day in the fourth quarter of 2020, even as it slashed costs. By contrast, Delta has labelled 2021 a year of recovery, anticipating that it will halt its daily cash burn of USD12 million in the spring.