EconomyEditor's PickNewsUnited Air Jumps After Pilot Deal to Avert Furloughs

2 years ago366 min
imageStock Markets56 minutes ago (Sep 28, 2020 01:45PM ET)

(C) Reuters.

By Christiana Sciaudone — United Airlines has reached a deal with pilots to avoid furloughs set to begin next month.

Shares were already trading higher and accelerated up 7.4%.The airline approved a pilot plan to avoid the furlough of 2,850 pilots starting Oct. 1, which is when $25 billion in federal aid expires.

United Airlines Holdings Inc (NASDAQ:UAL) is still planning to cut more than 13,000 jobs next month, and American Airlines Group (NASDAQ:AAL) 19,000, according to CNBC.

United CEO Scott Kirby (NYSE:KEX) has said he doesn’t expect demand to return to more than half of 2019 levels without a vaccine.

“While we still face a difficult path to recovery, your support of this creative and unique agreement puts us in an unparalleled position of strength when demand recovers,” a United executive wrote in a note to staff Monday. “This agreement greatly enhances our ability to bounce back – so we can welcome more passengers and return to the 2019 levels of seat and fleet advancement more quickly.”

Airline executives have gone to Washington to plea for more funding, but no package has been approved yet.

On Friday, American Airlines announced it had secured a $5.5 billion loan agreement from the U.S. government.

Under the terms of the U.S. Treasury facility, American may have an option to increase the loan in October by an additional $2 billion to an aggregate $7.5 billion.

Shares of American are up almost 6% and Delta Air Lines Inc (NYSE:DAL) rose 6.5%.

United Air Jumps After Pilot Deal to Avert Furloughs

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