United Airlines, pilots union reach tentative deal to avoid furloughs

(C) Reuters. FILE PHOTO: A United Airlines passenger jet taxis at Newark Liberty International Airport

By Tracy Rucinski

CHICAGO (Reuters) – A tentative deal between United Airlines (O:UAL) and the union representing its pilots would distribute the airline’s flight schedule among a larger number of pilots in an effort to avert furloughs, two people familiar with the matter said on Wednesday.

Earlier, United and the union, which represents more than 13,000 pilots, said they had reached an agreement in principle to potentially save jobs, but declined to provide more information, saying details were still being worked out.

United has said that some 2,850 pilots were at risk of being furloughed without an extension of government aid as the industry weathers a severe downturn in demand because of the coronavirus pandemic.

The agreement, which would need to be ratified by union members, keeps the current contract intact and has advantages for pilots with seniority, the people said.

The top third of pilots, for example, would take a 10% reduction in the minimum amount of flying they are guaranteed every month, but would be able to pick up overtime, one person said.

By having more pilots on hand, United would be able to quickly tap into any temporary or quicker-than-expected rebounds in demand.

Earlier, Chicago-based United forecast a 70% year-over-year decline in third-quarter capacity and a bigger drop in passenger revenue than its previous expectation, but said it was adding new non-stop flights to Africa, India and Hawaii next year.

U.S. airlines received $25 billion in payroll aid under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March and have been lobbying for a six-month extension to protect tens of thousands of jobs at risk when the first round expires this month.