Furlough estimate
04-29-2020, 08:55 AM
#111
Gets Weekends Off
Joined APC: Sep 2013
Posts: 951
- the Cares Act Payroll support program, which we have allready taken (3.5ish $M grant and 1.5ish $M loan) money from requires: "No involuntary furloughs or layoffs will occur until September 30, 2020 nor will employee wages or benefits be reduced until such date. "
- then the Cares Act loan program, which we have applied (4.5ish $M loan) for and would potentially use if approved requires: "Borrower, until September 30, 2020, will not reduce its employment levels as of March 24, 2020, and after such date will not reduce its employment levels by more than 10%."
Our 8-K outlined specifics about the approximately $5 billion in grant aid and loans that we expect to receive pursuant to the Payroll Support Program under the CARES Act to pay salaries and pay rates and benefits to tens of thousands of United employees. Of the $5 billion the Company expects to receive, approximately $3.5 billion will be a direct grant and approximately $1.5 billion will be in the form of a low-interest 10-year loan, which is expected to be pre-payable at par at any time. In addition, today’s 8-K notes an application we submitted on Friday under the Loan Program of the CARES Act that we expect will give us the ability, through Sept. 30, 2020, to borrow up to $4.5 billion from the U.S. Treasury Department for a term of up to 5 years in the form of a senior secured obligation of the Company.
In connection with any borrowings under the Loan Program and with the receipt of any funds under the Payroll Support Program, the Company and its business will be subject to certain restrictions and also expects to issue to the U.S. Treasury Department warrants to purchase shares of United Airlines Holdings, Inc. common stock.
In connection with any borrowings under the Loan Program and with the receipt of any funds under the Payroll Support Program, the Company and its business will be subject to certain restrictions and also expects to issue to the U.S. Treasury Department warrants to purchase shares of United Airlines Holdings, Inc. common stock.
04-29-2020, 09:10 AM
#113
Gets Weekends Off
Joined APC: Sep 2013
Posts: 951
The MEC update on April 23rd shows the 10% restriction if we take the loans as well. Now the devil is always in the details, but I think furloughing more than 10% presents problems if you take part in the loan program.
04-29-2020, 09:13 AM
#114
Gets Weekends Off
Joined APC: Apr 2015
Posts: 491
Non-airlines can’t furlough more than 10% before September 30th. After that they can furlough as many as they want. Airlines can’t furlough at all before September 30th. After that, as many as they want.
04-29-2020, 09:59 AM
#115
Gets Weekends Off
Joined APC: Jan 2019
Posts: 903
04-29-2020, 10:26 AM
#116
Gets Weekends Off
Joined APC: Sep 2013
Posts: 951
that makes the 20% reduction chart and 30% reduction chart by summer of 2021 more relevant I guess.
04-29-2020, 02:55 PM
#119
Banned
Joined APC: Feb 2018
Position: B-737 Captain
Posts: 657
CARES Act Worker Protections
• Grants - Airlines shall "refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020"
• Loans - "Business shall, until September 30, 2020, maintain its employment levels as of March 24, 2020, to the extent practicable" and, in any case, shall not reduce its employment levels by more than 10 percent.
Since United is also receiving Payroll Support Program grants, the "no-furlough" clause applicable to carriers taking grants would supersede the 10 percent furlough allowance in the loan provisions and protect against all involuntary furloughs until September 30, 2020.
• Grants - Airlines shall "refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020"
• Loans - "Business shall, until September 30, 2020, maintain its employment levels as of March 24, 2020, to the extent practicable" and, in any case, shall not reduce its employment levels by more than 10 percent.
Since United is also receiving Payroll Support Program grants, the "no-furlough" clause applicable to carriers taking grants would supersede the 10 percent furlough allowance in the loan provisions and protect against all involuntary furloughs until September 30, 2020.
04-29-2020, 04:29 PM
#120
Line Holder
Joined APC: Feb 2013
Posts: 49
My question for the guys who've been around for a while: how much can an airline realistically furlough at one time? For example, if they plan on furloughing 4000 guys, I doubt they'll just axe them all on October 1st and completely wreck their narrowbody fleet for months and months.
I've been hearing numbers like 1-2k off the top to begin with, then maybe 50-100 per month. Just curious as to how this sort of thing has goes down in the past.
I've been hearing numbers like 1-2k off the top to begin with, then maybe 50-100 per month. Just curious as to how this sort of thing has goes down in the past.
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