United Air’s new CEO eases tone on job cuts in overture to labor

United Airlines Holdings Inc.’s new chief executive officer vowed to work with the carrier’s labor unions on “creative” ways to slash labor spending and potentially avoid furloughs if travel demand doesn’t recover by October.

Reduced work hours would be one possible approach, Scott Kirby said Wednesday in an interview with CNBC and again at the United’s annual meeting. His comments contrasted with the airline’s dire tone on jobs in recent weeks and an earlier attempt to move 15,000 employees to part-time status—a plan that was reversed after it prompted a lawsuit by the workers’ union.

“We hope we can work with unions to avoid furloughs and actually just use fewer hours,” Kirby said in the interview. “We’re going to need to work with our union partners—and we already are—to accomplish that. By far, that is in the best long-term interest of all our people. It preserves jobs in the long-term and our ability to snap back” when demand returns.

Airlines are rushing to cut costs by parking planes, reducing flights and paring employment expenses as travel demand collapses because of the coronavirus pandemic and government travel restrictions. While mass layoffs are restricted through September under the terms of the U.S. government’s $25 billion in airline payroll aid, carriers have offered employees voluntary leave and early retirement while also cutting executive pay.

Cuts in work hours or other options “are difficult and will need to be widely shared by everyone here at United,” Kirby said at the shareholder meeting. About 20,000 of the company’s roughly 95,000 employees already are on voluntary leave and “tens of thousands” are working reduced hours, the airline said May 1.

Kirby cited United’s flight attendants, about half of whom have accepted voluntary options and aren’t flying now. If travel demand rises to about half of last year’s levels, “we wouldn’t need to furlough a single flight attendant,” he said.

Airline workers who are furloughed under union contracts retain a right to be called back to their job when conditions improve.

United said earlier this month it would slash management and administrative positions by 30% after Oct. 1 and warned pilots of the risk of involuntary furloughs.

Kirby said he’s confident travel demand will return but warned that it won’t fully recover until after a coronavirus vaccine is developed.