JetBlue, pilots union reach agreement to avoid involuntary furloughs until May 2021

Key Points
  • Airlines are under pressure to reduce costs as Covid-19 continues to hurt travel demand.
  • All U.S. airlines that took part of $25 billion in federal payroll grants and loans cannot furlough or lay off workers through Sept. 30.
  • The union didn't disclose details of the agreement but said it won't change pay rates.
JetBlue plane makes a flyover of New York City as a tribute to health care workers and first responders, as it seen from Weehawken in New Jersey on May 7, 2020.
Kena Betancur | AFP | Getty Images

JetBlue Airways and the labor union that represents the airline's pilots have reached an agreement that avoids involuntary furloughs through April of next year, according to a union memo sent to pilots Wednesday.

The JetBlue chapter of the Air Line Pilots Association voted to approve a letter of agreement that "protects all JetBlue pilots from involuntary furlough — under any circumstances — until May 1, 2021," said the union memo, which was seen by CNBC. The airline had about 3,600 pilots and more than 21,000 employees in total, according to its 2019 annual report.

JetBlue didn't respond to a request for comment. 

The agreement comes as pressure is mounting on airlines to slash costs as the Covid-19 pandemic continues to hurt travel demand. 

The JetBlue pilots' union agreed to "short-term changes" with an "earlier snapback if demand for flying recovers," said the memo, but it was not immediately clear what that entailed. The memo said there won't be changes to collective bargaining agreement pay rates or "significant modifications" to work rules.

"In this environment, this is the highest level of codified pilot protection in our industry to date," said the memo.

"Airline pilots have been on the front lines of this public-health crisis and were part of the first wave of those directly impacted by the associated economic fallout," the union said in a statement to CNBC.

Major U.S. passenger airlines accepted $25 billion in federal aid this spring that prohibits them from laying off or cutting the pay rates of workers through Sept. 30. Executives have warned they expect to need fewer employees and say they want to exhaust voluntary measures before turning to layoffs.

American Airlines on Tuesday told employees that it expects to have up to 8,000 flight attendants more than it needs this fall. The airline had more than 25,000 flight attendants as of the end of last year.

"While our surplus is evolving based on our schedule plans and the items I'll outline below, we expect to have an overage of between 7,000 and 8,000 flight attendants this fall," Jill Surdek, senior vice president of flight service said in a staff note. "This does not mean we'll furlough that many flight attendants, but it is an overage we will need to address. Our goal is to reduce this number as much as possible through voluntary options and working with the unions."

The Fort Worth-based airline is also planning to close flight attendant bases in airports serving the Raleigh-Durham area and St. Louis, as revenue remains weak, Surdek said. The carrier is also shrinking several bases and reducing staffing on wide-body planes used for transcontinental and international routes.

Delta Air Lines told pilots Friday that said will warn more than 2,500 of them this week about possible furloughs. The Atlanta-based carrier urged eligible pilots to take early retirement packages, which include partial pay in some cases for three years.

United: Demand has flattened within the last week as Covid-19 cases rise
United: Demand has flattened within the last week as Covid-19 cases rise