The pilots of United Airlines avoid furloughs for now. The Pandemic Recovery letter of Agreement was voted by 58 percent in favor versus 42 percent against margin.
The agreement will prevent 3,900 pilots from being furloughed starting in October.
The agreement between the pilots and the company was negotiated through the ALPA pilot union.
With the new agreement, no pilot furlough can occur until June 2021 at the earliest.
United Pilot Pandemic Recovery letter of Agreement
Considered a win-win situation for the pilot group as a whole the agreement temporarily provides United with the flexibility needed to meet the challenges of the airline’s market recovery.
Of course, the plan is based on the airline industry banking on a comeback from the coronavirus crisis during the next summer travel season.
What a Yes versus a No-vote meant
The arguments for and against the agreement boiled down to how pilots with different seniority levels would be affected, based on the outcome.
- A Yes-vote meant that senior pilots would make concessions in exchange for saving the jobs for the junior pilots. In other words, the yes-vote would keep all pilots from getting furloughed.
- A No-vote meant that thousands of junior pilots would be furloughed, but securing the interests of the senior pilots.
United pilots avoid furloughs, but agreement not without risks
The pilots were voting for their career’s long-term viability while maintaining United’s strategic agility. The company’s goal is to recapture and regrow its market share when passengers return to the skies.
By keeping as many pilots on the property as possible United will be in the best position to recover from the pandemic as fast as possible.
However, the agreement comes with risks. Some pilots were concerned that the concessions, such as the lowered Minimum Pay Guarantee, could be a precedence to future pay cuts.
Another concern was that should United Airlines declare bankruptcy in the future a bankruptcy judge could consider what is supposed to be temporary COVID-19 concessions the rules for bankruptcy recovery.
Estimating coronavirus crisis airline recovery
The United-agreement should be considered a strategy to buy time for recovery.
But, when will the airline industry recover?
- When a vaccine becomes available?
- After government coronavirus restrictions are lifted around the world?
- When business and pleasure flying both recover?
- After the economy recovers?
Cares Act II
At this time it does not appear that the U.S. Government is getting anywhere with another aid-package, neither for Americans in general or for U.S. airlines.
There is a general consensus that there is an urgent need for the government to issue more aid.
However, with the election weeks away and both parties fighting like cat and mouse, not being able to agree over the terms of such aid, it appears that the airlines as well as the American people cannot bank on any rescue to arrive soon.
Featured Image: CaptainJetson.com.