- The bipartisan coronavirus aid package passed by Congress on Friday offers $58 billion to the nation's airlines , split evenly between loans and payroll grants.
- The payroll grants will pay airline workers salaries as travel demand plummets. By accepting the grants or the loans, airlines will agree not to furlough or lay off staff through September, 2020.
- But in a candid letter to employees, United's CEO and president warned that, based on how the virus is expected to spread and the predicted impact to the economy, staff reductions will likely be necessary after that.
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Workers at US airlines are safe from furloughs or layoffs through at least September 2020, after Congress agreed to $29 billion in payroll grants to airlines as part of the $2 trillion stimulus package that President Donald Trump was expected to sign on Friday.
However, United Airlines says that after that, it's likely that jobs will end up being cut.
In a candid letter to employees and seen by Business Insider, United CEO Oscar Munoz and president Scott Kirby warned that, depending on how the COVID-19 pandemic progresses, it's likely that travel demand will not recover "for some time."
"And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year," they said. "We will continue to plan for the worst and hope for a faster recovery but no matter what happens, taking care of each of our people will remain our number one priority."
"That means being honest, fair and upfront with you," they added. "If the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today."
Under the terms of the payroll grants and operational loans in the stimulus package, airlines accepting aid are prohibited from involuntary furloughs or layoffs through September 30, 2020.
The speed and scope of the pandemic's impact on the global economy and aviation market has been virtually unprecedented, with demand drops and capacity cuts outstripping the weeks after the terrorist attacks of September 11, 2001 and the worst of the 2008-2009 global financial crisis.
US airlines have slashed capacity across domestic and international networks and grounded significant portions of their fleets as borders have been closed, travel bans have been implemented, and social distancing guidelines have been pressed with more urgency, including lockdowns in some parts of the US.
United has reduced its schedule by more than 60% in April, and expects planes that continue to fly to be mostly empty.
During a press briefing on Friday, a senior United official said that the stimulus package bought the airline some time and breathing room, and would allow it to plan its next steps more deliberately and to develop contingency plans for various outcomes.
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