united-airlines-tail

Just like hockey, the aviation industry is a draw for many-many reasons, but ultimately everyone loves the fights. In a world without travel, there are more to come.

There’s just nothing like dropping the gloves and saying “let’s go”, and in the first labor positive move in decades, American Airlines CEO Doug Parker appears to have fired the first shot across the bow of United Airlines, stating that the airline can’t simply turn full time employees into part time.

united-airlines-tailFight, fight!

In a call to labor management and outside teams, American Airlines CEO Doug Parker offered an interesting quip regarding long time frenemy Scott Kirby, incoming CEO of United.

The remark came at an awkward time, and perhaps wasn’t meant to be picked up by Forbes (whoops), but in response to United Airlines plans to make full time staff part time, Parker effectively said that United is “gaming” the payroll protection and bailout stipulations. Worse, the gaming will have an extremely negative impact on United’s workforce. Parker stated…

“Some airlines think it is OK to go and cut employees’ hours..

“One [airline] is cutting full-time from 40 hours to 30, a 25% cut in pay, I was there when we were working on CARES and that wasn’t the intent or meaning of it.

And that is not just for union employees – it is for non-union, too. We disagree with [United’s] position, and if anyone asks, we will let them know we disagree with their position.”

Virtually every global airline will face staffing issues in the next few months, with dwindling demand unlikely to reach the record breaking heights of 2019 for many years to come.

But after US government bailouts in the double digits of billions and other props to the US airline industry, laying off key employees in their greatest time of need, or significantly reducing pay seems opportunistic, at best.

united polaris business class cabin

United accepted over $3 billion through CARES grants to NOT lay off workers, but found a loophole in the program which will allow the airline to effectively do so, while greatly reduce costs. Essentially, the airline can just offer employees “less” work, which allows the airline to maintain the bailout stipulation that it not reduce pay rates, while effectively reducing pay rates.

Of course, United will keep the money.

Adding insult to perhaps literal injury – ala Dr. Dao – United has re-written severance policies to create more instances where there’s none whatsoever. The airline plans to fire 30% of its workforce in the days immediately following government payroll protection limits, so that’s fairly handy.

You could throw stones, but then again, American Airlines used bailout money to announce a $150 per bag fee for international itineraries.

It’s all a tad ironic for United. The airline historically found any and all loopholes to extract value from its loyalty programs so abhorrent, it trained employees to “shut them down”, so to then use a loophole to wiggle out of decency in employment during a crisis is rich.

To reiterate American Airline CEO’ Doug Parker’s main point: he was in the room when these legislative actions for airline support were put into place by government decree, and this was not the intention of the bills passed. For an airline CEO in the US to speak out against another airline in the very close, loosely competitive tribe is almost unheard of.

It’s hard times for airline employees everywhere, but particularly at United, where even the CEO of a competing airline in a largely non competitive airline market takes a shot at leadership. When Scott Kirby takes over as CEO of United on May 20th, he’ll have plenty to address.

Gilbert Ott

Gilbert Ott is an ever curious traveler and one of the world's leading travel experts. His adventures take him all over the globe, often spanning over 200,000 miles a year and his travel exploits are regularly...

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9 Comments

  1. There simply isn’t 40 hrs/week of work to do. Do you really think airlines should pay people to twiddle their thumbs? Correction: Do you really think taxpayers should pay people to twiddle their thumbs?

    1. Correction, they already did. They did not however pay to have airlines refill their coffers with money intended to protect the integrity of a job, not just “a” job.

      1. As I understand, they did not get prepaid for all of their payroll expenses at the current run rate through October 1st. Any reduction in payroll will be a reduction in their subsidy. Am I wrong? So if I’m not wrong, then if airlines cut some payroll expense by reducing hours, they are also reducing taxpayer burden, as well as of course their long term HC expense, which we all know is coming down either sooner or Oct 1st.

  2. There is a reason why AA has the most debt of any airline. Bad management decisions since Parker has taken over the reigns at American. Given the debt they had pre-covid and the additional debt they have taken on since, they will be in bankruptcy in a couple years.

    The comments coming out of AA’s mouth over the past several weeks is so absurd. At least United is being transparent and addressing their issues versus AA who is either not being transparent in their intentions or just making more bad management decisions by not re-evaluating their hubs and/or leaving the company with a bloated workforce.

  3. If American CEO had any brains AT ALL, he would do the same thing. .That is the only way an airline will survive..It may be “Bah bye” American

  4. I work here and for many groups (including mine), there is still at least 40 hours of work to do. The front line may have a lull but planes still need care, feeding and compliance work completed. However, now we are expected to do it for less pay, I mean less hours.

  5. Interesting that you seem to pile on UA when B6 did the exact same thing…my guess is that they watched to see how regulators would react and when they didn’t, UA followed suit…smart business move when this is about survival more than anything else. Additionally DL full out cut salaries for everyone by 25% right before this bill passed (they likely knew what restrictions were coming so they acted swiftly to get in before the bell) and no one seems to be blasting DL. Parker seems to be the only one oblivious to the world burning around him.

    1. You lost me at “survival” in the context of the big 3 US airlines. That ship sailed I think week one into the pandemic.

  6. I have no pity for UA. They put themselves in this situation. They have been burning their cash for a while buying their own stock. They just recently took delivery of several new 787s a couple of weeks ago. Instead of acting in any reasonable manner, they have cut employees pay, forced them to take unpaid leave (for the record so did B6 – thanks slimeball Ben Baldanza), have changed their contract of carriage well after tickets had been purchased, hoarded cash (and continue to) from their customers, punished their most loyal customers, completely destroyed their ‘loyalty’ program, and overall offer a very bad customer experience. If the company fails, so be it. Some other one will come along. We lost the great Continental years ago unfortunately. We lost many great airlines in the past. Let this one go, clear out the entire management structure and re-brand back to Continental with actual competitive products and services. It’s time this America West management be put to rest for good.

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