United Airlines, pilots union reach creative deal to limit furloughs

Spain hailed its medic heroes during the coronavirus crisis, but as infections fall many frontline staff has been left depressed and traumatized by their experience, fearful of an insecure future.
With 36.3 percent of public healthcare workers without a permanent contract, according to one survey, demonstrations calling for change are growing.
"We have to end this low-budget health system," says Patricia Calvo, a 40-year-old doctor, who made her own protective gear out of bin bags at the height of the pandemic.
"I finished specializing in 2010 but I'm still on a temporary contract," says the doctor from the southern city of Granada where she works with 14 other medics, most of whom are in the same situation.
"There was a major outbreak at our medical center, people died and (at the start) we had to deal with everything on our own."
When the virus hit, costing more than 28,400 lives, Calvo and her husband, who is also a doctor, spent months without hugging their children for fear of infecting them.
And they themselves were afraid of getting sick in a country where 10 percent of healthcare workers contracted the virus, twice the rate of the general population.
- 'Abusive contracts' -
"If there is a new outbreak in the autumn, we could find ourselves facing a very serious lack of staff," warned Pilar Grande, a 48-year-old nurse at a Madrid hospital.
"The staff are exhausted, there are a huge number of people off, a lot of anxiety, and many people with symptoms of depression."
Since May, demonstrations calling for "quality public healthcare" have multiplied.
Elena Barci, a 39-year-old auxiliary nurse in Madrid, says she's worked for 12 years on "abusive contracts".
"They take you on for five days, from Monday to Friday" so they don't need to pay for the weekend, "and the contract starts again on Monday".
In March, she was called in to help at a hospital in Madrid.
"People were dying and you didn't even have time to find out their name. You would leave in tears while knowing that once it was all over, you'd be redundant again."
She left at the end of May, but was contracted again at the start of July and is now dreaming of "a decent contract".
Medical residents, or specialists, working at Madrid hospitals recently went on strike over salaries which have still not reached the levels they were in 2009 when the last financial crisis took hold.
"Jobs are very insecure which creates widespread anger," explained Dr Vicente Matas who has seen many younger colleagues leaving for France, Germany, or Finland.
"And the pandemic has been the last straw when they've had to face the virus without adequate means of protection and with tremendous workloads."
- Bolstering public healthcare -
Spain's Prime Minister Pedro Sanchez has pledged to invest nine billion euros into Spain's decentralized public health system.
"We cannot come out of this crisis with a public health system that is weaker than what we already had, which was a result of the austerity policies" put in place by regional governments following the 2008 crisis, he said.
Beatriz Gonzalez Lopez-Valcarcel, who specialises in the healthcare economy, said public health spend "reached its maximum in 2009 and was reduced every year between 2010 and 2013, by a total of some 8.2 billion euros."
It began to increase again in 2014 and by 2018, had reached 2009 levels, she said.
In Madrid, officials say the health system has been "reinforced with more than 10,100 additional hires, who will be kept in place until December 31".
But staff want the contracts to be extended beyond that date.
 United Airlines (UAL.O) and its pilots’ union said on Thursday they had reached an agreement on two different packages aimed at reducing involuntary furloughs in the fall and keeping pilots at the ready once coronavirus-hit demand starts to pick up.
U.S. airlines, grappling with a dramatic industry downturn, have warned that tens of thousands of jobs are on the line in October when a U.S. government bailout runs out.
To minimize the number of forced cuts, large airlines have been offering a variety of early departure packages.
United’s agreement with the Air Line Pilots Association International (ALPA) includes an early retirement deal for pilots 62 and older, as well as a slew of different options for pilots to voluntarily reduce their hours or take a leave of absence during which they would potentially receive health benefits as long as they keep up their training, covered by United.
Bryan Quigley, United’s senior vice president of flight operations, sent the terms to pilots in a memo late Thursday which was reviewed by Reuters.
ALPA Chairman Todd Insler said the deal had “groundbreaking provisions that provide the option (for pilots) to remain qualified, allowing a faster recall once passenger demand returns.
Airlines are generally reluctant to furlough pilots because of the timely and costly training involved in bringing them back. If a COVID-19 vaccine is developed and demand returns, airlines want to be able to respond quickly.
Airlines had hoped for recovery before $32 billion in government payroll grants for the aviation industry expire in September. Now unions are lobbying lawmakers to provide another $32 billion through March to prevent tens of thousands of furloughs.
Chicago-based United said last week it was sending notices of potential furloughs to 36,000 U.S.-based front-line employees, or about 45% of staff, including 2,250 pilots.
The U.S. economic recovery showed signs of plateauing last week as the country battled rising coronavirus case counts and increasingly fractured government response, according to data from a broad set of industry and government sources.

FILE PHOTO: A waitress takes the temperature of customers as they arrive to eat at Dudley's as restaurants are permitted to offer al fresco dining as part of phase 2 reopening during the coronavirus disease (COVID-19) outbreak in the Lower East Side neighborhood of Manhattan in New York City, U.S., June 27, 2020. REUTERS/Andrew Kelly
Indexes measuring the national recovery from the New York Federal Reserve here Goldman Sachs here and Oxford Economics https://www.oxfordeconomics.com have all largely stalled. Meanwhile, real-time measures of retail foot traffic www.safegraph.com/dashboard and employee work hours joinhomebase.com/data and shifts have flatlined after steady growth since April spawned optimism for a swift rebound from the recession triggered by the global pandemic.
At the same time, evidence of retrenchment is spreading beyond the high-profile examples of Texas, Florida, and California, major state economies where efforts to reopen commerce have been thrown into reverse by fresh restrictions to stop the spread of the COVID-19 disease.
Since the beginning of the fight against the pandemic, the aim has been to “flatten the curve” - meaning stem the growth in infections. Instead, four months in, it may be the wrong curve that is flattening as the recovery slows while the virus surges ahead.
Atlanta Federal Reserve Bank President Raphael Bostic said on Thursday the early strength of the recovery surprised him, but “the question is as we have gotten to this point what should we expect moving forward.”
“Real-time evidence suggests there is a bit more reticence in the economy,” he said.
Data from cellphone tracking firm Unacast here as of July 3 showed more than half of states saw retail traffic surpass 2019 levels. A week later the number had slipped to 11, most of them rural, less-populated places like Maine and Montana.
For a graphic on Close, reopen, retrench Close, reopen, retrench:
Reuters Graphic
In industrial states including Iowa and Indiana where retail traffic has exceeded 2019 levels, case counts are growing - suggesting there is no clear template yet in place for how to reopen the economy in a way that preserves public health.
“People did have that initial impetus to reengage. Now we see a spike in infections and that is going to put a damper on the recovery,” said Elizabeth Crofoot, a senior economist at the Conference Board, an organization of major companies.
The board published a survey this week concluding that U.S. consumer confidence had been driven lower in part by lack of trust in the government’s ability to control the pandemic, and would likely remain “depressed” for a sustained time.
More notably, she said “the trust factor, the mixed messages from local government, the federal government,” would likely drive people from the marketplace regardless of any formal restrictions imposed or lifted by authorities.


The last week put those mixed messages on stark display.
As the daily growth in cases continued to set records, topping 60,000, the Trump administration was battling with state and local governments over whether to reopen schools and the adequacy of testing and challenging the credibility of the nation’s top infectious disease expert.
Nearly 3.6 million Americans have now been infected and more than 137,000 have died during the pandemic.
The news is not all grim. Death rates in recent weeks have remained low compared with the earliest days of the pandemic, and some argue the country is going through a “learning” phase that will see individuals and companies develop their own ways to cope with the persistence of the disease.
Mask usage has become less stigmatized - Wal-Mart Inc (WMT.N) is making them mandatory as of Monday - and a Cleveland Fed survey of 1,141 U.S. consumers here published Thursday showed nearly 90% said they wore a mask the last time they were in a public indoor space such as a store.
In comments to reporters last week St. Louis Fed President James Bullard said he thought individuals and businesses would adopt ways to manage their lives and their firms safely - with masks and social distancing likely to become a broadly accepted norm even after months in which they’ve been a topic of political dispute.
“These businesses have strong incentives to get their revenue streams back,” he said. “They can pretend there is not a disease. They will get punched in the face. Workers get sick. Customers get sick ... Learning occurs.”
Nor is the economic data uniformly bad. Retail sales jumped 7.5% in June as states lifted coronavirus restrictions and summer arrived.
But even that may be illusory.
A recent study by the JPMorgan Chase Institute concluded that expanded unemployment benefits approved in response to the pandemic allowed those thrown out of work to actually increase their spending. Those benefits expire at the end of this month.
Jobs, meanwhile, may not be returning fast enough to take up the slack. Another 1.3 million people filed for unemployment here insurance last week USJOB=ECI, and several states that had tried to aggressively reopen their economies saw large jumps in ongoing unemployment claims as virus cases exploded and new restrictions were imposed.
Nationally, data from time management firm Kronos here across a variety of industries showed work shifts for the week ending July 12 declined for the first time since mid-April, excluding the Memorial Day and July 4 holiday weeks when some businesses may have closed or reduced hours.
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