United’s new CEO eyes union cooperation to avoid staff cuts in pandemic crisis

United Airlines‘ new CEO Scott Kirby said Wednesday the airline could work with labor unions to avoid furloughs this fall despite low demand because of the coronavirus pandemic.

Airlines are prohibited from laying off or cutting the pay rates of their employees through Sept. 30 under the terms of a $25 billion federal coronavirus payroll support program. 

Kirby told CNBC’s “Squawk Box” he’s hopeful the company can work with the unions to adjust pay without temporarily or permanently cutting jobs, “and instead using voluntary programs and, in particular, asking people to work fewer hours until we get through the crisis.”

Carriers, including United, this week reported a slight uptick in demand but air travel is still down more than 90% from a year ago, as the virus and measures to stop it like shelter-in-place orders keep potential vacationers and business travelers at home.

“By the time to get to Oct. 1, hopefully we will have continued to see a in a recovery in demand but none of us think it’s going to be back to 100% and that is going to lead to some hard decisions,” Kirby said.

Kirby, who takes the reins Wednesday, said the airline is considering voluntary measures such as working fewer hours or changes in pay structure with unions to avoid cutting the jobs of front line workers like flight attendants outright.

“If we can keep them kind of on the sidelines a little bit while we get through the crisis then when there is a recovery, and there will be a recovery … we can snap back quickly,” Kirby said. “If we furlough people, if we lay them off, the snap back is going to be really, really hard.”

More than two-thirds of United’s roughly 96,000 employees are unionized, according to a company filing.