• Joe Cahill On Business
  • Joe Cahill On Business

    The one factor working in United Airlines' favor now

    Support from a heavily unionized workforce is a key intangible working in United's favor as it confronts a slowdown of potentially epic proportions.

    United Airlines jets
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    79彩票注册网址As United Airlines stares down the barrel of a travel downturn potentially far worse than prior slumps, it can take some comfort in knowing that everybody's on board this time.

    Thanks largely to the conciliating efforts of outgoing CEO Oscar Munoz, United management and workers are more unified than at any time in the company's recent history. That sense of common purpose can only help as United navigates the repercussions of a coronavirus pandemic that's projected to cost the airline industry before it's over.

    In an early sign of solidarity, United's unions didn't object when Munoz's anointed successor, company President Scott Kirby, announced double-digit cutbacks as virus fears vaporized travel bookings. United plans to cut79彩票注册网址 domestic flying 10 percent, and international flights 20 percent in April and May. The company also instituted a hiring freeze and offered employees unpaid voluntary leaves.

    79彩票注册网址In other times, such moves might have ignited fury from unions. This time, union leaders applauded.

    "We believe the airline is taking responsible steps for employees and the traveling public. Together we fly," said Sara Nelson, president of the Association of Flight Attendants, which represents flight attendants at United. Nelson emphasized that "the airline has worked with our union from the start to implement safety and health measures to ensure crew and passengers are safe."

    79彩票注册网址Nelson's remarks, along with similar comments from the United pilots union, reflect a sharp shift from the us-versus-them mentality that prevailed during the Great 79彩票注册网址 and the post-9/11 air travel meltdown that tipped United into Chapter 11. Bad blood lingered for years as unions nursed grudges over concessions extracted from their members during bankruptcy. Relations hit bottom under Munoz predecessor Jeff Smisek, with pilots going so far as to launch a website labeled "the unfriendly skies" to protest cost-cutting moves.

    79彩票注册网址Munoz inherited that sour relationship when he succeeded Smisek in 2015. He bought labor peace in a series of union contract negotiations, handing out generous raises to embittered pilots, flight attendants and mechanics. As employee morale improved, United's operational and financial performance picked up, too.

    79彩票注册网址"Oscar worked closely with ALPA from day one, and together we have successfully turned United around," Todd Insler, head of the Air Line Pilots Association unit representing United pilots, said in a statement in December reacting to news that Kirby would succeed Munoz in May. Munoz will stick around for a year as executive chairman.

    Insler also praised Kirby, architect of an aggressive growth strategy pilots enthusiastically support. "Scott has helped deliver on the promise to grow our global network and return United to the ranks of the world's best airlines," Insler said.

    Support from a heavily unionized workforce is a key intangible working in United's favor as it confronts a slowdown of potentially epic proportions. To minimize damage and emerge with its finances and reputation in good shape, United needs everyone to pull together and make sacrifices for the good of the company. People are more likely to put forth such an effort when they believe in their leaders and feel like part of a team.

    79彩票注册网址Munoz and Kirby agreed to forgo salaries until at least June 30, a gesture that could enhance their credibility when they ask others to take one for the team. United also suspended share buybacks, which conserves cash while pleasing unions by making Wall Street share the pain.

    79彩票注册网址"We are in constant communication with union representatives and keeping them apprised of the seriousness of the situation so that we can collectively get through to the other side," United spokeswoman Rachael Rivas says.

    Still, a prolonged slump would test the goodwill United brass has built up among employees. The longer a slowdown lasts, the more United's finances suffer. At some point, management would come under pressure to cut jobs and take a harder line in union contract negotiations this year.

    United is preparing for a deep but relatively brief impact, with revenue plunging 70 percent in April and May but recovering to a 20 percent decline by the end of the year. That scenario enables Kirby to avoid layoffs for now. However, he's warning that could change if his projections prove overly optimistic.

    79彩票注册网址"I'll feel sick about it, but I won't hesitate to do it," he told investors March 10. "I'll feel awful."

    It's a good bet United's employees and their union leaders would feel even worse.

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