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United Airlines service workers’ union sues over schedule cuts after carrier got federal aid

https://www.cnbc.com/2020/05/05/united-airlines-service-workers-sue-over-schedule-cuts-after-airline-got-federal-coronavirus-aid.html

The labor union that represents more than 25,000 United Airlines aircraft and passenger service workers sought an injunction Tuesday against sharp schedule cuts, alleging the airline violated the terms of billions in federal coronavirus aid by cutting employee work schedules.

Airlines last month started receiving portions of $25 billion in grants and loans that were earmarked for the sector in the $2.2 trillion CARES Act, the third federal stimulus package and designed in part to help industries hardest hit by the pandemic. A condition of accepting that federal aid is that airlines do not lay off or cut the pay rates of workers through Sept. 30, though executives at major carriers including United and Delta admit they expect to become smaller airlines.

Last month, United said it reached an agreement with the Treasury Department for about $5 billion in payroll support under the CARES Act.

As air travel demand plunged more than 90% in the U.S., airlines have raced to cut costs, parking thousands of jetliners, slashing routes and urging thousands of employees to take unpaid or partially paid voluntary leaves. But several of them, including United, Delta and JetBlue, have announced or already implemented reduced worker schedules with fewer flights, meaning employee paychecks are smaller.

“Travel demand is essentially zero – you see that at our airports and on board our aircraft – and we don’t know when it’s going to come back,” United’s chief operations officer, Greg Hart, said last Friday in a staff note, seen by CNBC. “And importantly, even with a federal government grant that covers a portion of our payroll expense through September 30, we anticipate spending BILLIONS of dollars more than we take in for the next several months, while continuing to employ 100% of our workforce. That’s not sustainable for any company and that’s why we are making difficult decisions across our entire business.”