Airline, Disney Job Cuts Land on Credit Unions

Layoffs and furloughs involving 60,000 U.S. workers announced last week will land heavily on credit unions that serve them.

American Airlines and United Airlines announced Oct.1 they will begin furloughing more than 32,000 workers, The Walt Disney Co. announced Sept. 29 that it is laying off 28,000 U.S. theme park workers, many of whom Disney had kept on furlough with full health benefits for the past six months in the hope the pandemic would recede by fall.

About 65,000 of those Disney employees are members of Partners Federal Credit Union, Burbank, Calif. ($2.1 billion in assets, 180,682 members).

Partners, with offices in offices in California and Florida, serves almost 45% Disney’s domestic employees and “cast members” — Disney’s term for costumed theme park workers, said Michael Terzian, EVP/Chief Member Service Officer.

Since the start of the pandemic, Partners has helped 72,000 members through a variety of emergency loans, fee waivers, payment deferrals, and other relief services. It has waived more than $360,000 in fees, originated almost 3,000 emergency zero-interest loans and deferred 115,000 consumer and home loan payments.

Those financial relief programs will be extended to “members impacted by the current layoffs at The Walt Disney Company or other employers,” Terzian said. “As the pandemic’s impact continues to unfold, Partners will evolve its Member Assistance Program to best serve its membership.”

Credit unions with strong ties to airlines include:

• Alliant Credit Union, Chicago, ($13 billion in assets, 521,484 members), a legacy of United Airlines employees. Ten years ago, about 160,000 of its 240,000 members were employees of United.
• American Airlines Federal Credit Union, Fort Worth, Texas ($8.4 billion in assets, 312,338 members).
• Southwest Airlines Federal Credit Union, Dallas, ($694.4 million in assets, 58,241 members).
• Delta Community Credit Union, Atlanta, ($7 billion in assets, 419,413 members), with about 20% of members being active, former or retired Delta Air Lines employees.

Dallas-based Southwest Airlines has said it does not plan to lay off any employees due to the large number who have opted for early retirement or voluntary leave. Atlanta-based Delta Air Lines also has avoided layoffs through voluntary programs.

Delta CFO and EVP Paul A. Jacobson said on Sept. 17 that the airline has had volunteers from 45,000 employees for short-term, unpaid leave and 17,000 people for early retirement. The unpaid leaves helped Delta cut its expenses for salaries and benefits by 24% in the second quarter.

Planning for the future is tricky, he said. The company is expecting its flight capacity in 2021 to be down by “a massive variability” of 25% to 40% from 2019 levels.

Delta Community was founded in 1940 to serve Delta Air Lines employees, and has broadened its membership base to include anyone living or working in metro Atlanta, in addition to its 150 employer groups that include Chick-fil-A, RaceTrac and UPS.

John Kennedy, Delta Community’s AVP of corporate communications, said the credit union closely monitors economic events that might affect its members.

Since the start of the COVID-19 public health crisis, Kennedy said the credit union has made sure advisory services and financial assistance programs were in place to help people with budgeting, applying for unemployment benefits, applying for loan payment deferrals, and navigating the early retirement packages offered by some employers.

“We stand ready to assist any members facing financial hardships such as unexpected expenses, reductions in pay, or job loss,” he said. “As COVID-19 continues to impact our economic and physical health, Delta Community remains committed to listening to our members, and responding with products and services that are flexible enough to help them through today’s challenging environment.”