Several weeks ago, United Airlines (NASDAQ: UAL) sent Worker Adjustment and Retraining Notification (WARN) notices to 45% of its domestic workforce (36,000 employees), alerting them to potential furloughs or layoffs in October. United's 12,000-plus pilots accounted for 2,250 of the WARN notices.
United Airlines relied on fairly conservative assumptions for future air-travel demand when deciding how many WARN notices to send. Unfortunately, demand trends have been even worse than the company had expected. As a result, United recently told its pilots that it may need to furlough more of them than initially planned -- and sooner than it previously anticipated.
In early July, United Airlines warned employees and investors that bookings momentum had stalled out in late June, following two months of rapid sequential improvement. It attributed the trend change to a surge in U.S. COVID-19 cases and related restrictions on travel and other activities.