United Airlines (NASDAQ:UAL) stock plunged in Friday’s pre-market after a tentative agreement on voluntary furloughs and early retirement packages with the union representing its 13,000 pilots.
The agreement is the latest effort to slash costs as the coronavirus pandemic devastates travel demand.
The deal comes as chances for a recovery in air travel grow more remote as cases of COVID-19 spike and states like New York and New Jersey issue quarantine orders for some arriving travelers in a bid to stop the disease from spreading, executives have warned.
The deal would need to be ratified by union leaders next week. The details weren’t immediately disclosed.
The agreement was announced a day after United warned about 36,000 employees — close to 40% of its workforce — that they could be furloughed when the terms of federal aid that prohibit job cuts expire on Oct. 1. That included possible furloughs of more than 2,200 United pilots.
United and other airlines are urging employees to take early retirements or buyouts in order to limit layoffs when the terms of the $25 billion in payroll support run out in the fall.
United is the last of the four biggest U.S. carriers to reach such an agreement with pilots.
UAL shares gained 27 cents to $30.44 in early Friday trade.
