The incredible drop in travel demand has devastated the airline industry. With no relief in sight, United is taking new measures.
- In an email to employees, United Airlines said it would cancel 10% of domestic flights and 20% of international service in the coming months as demand for travel falls due to the coronavirus outbreak.
- United CEO Oscar Munoz and president Scott Kirby also outlined a series of cost-cutting measures, including voluntary unpaid leaves for employees, and a hiring freeze.
- The coronavirus, or COVID-19, has impacted the airline industry especially hard, leading to flight cancellations, route suspensions, and uncertainty in the markets.
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United Airlines CEO Oscar Munoz said on Wednesday that the airline would make significant cuts to its flight network and implement a series of cost reductions, as the coronavirus outbreak continues to wreak havoc on the airline industry in the US and worldwide.
In a memo to employees sent by Munoz and United president Scott Kirby — who is set to take over from Munoz later this year — said that the airline would cut 20% of its international schedule and 10% of its domestic flights in April, with similar cuts in May.
The international network downsizing includes already-announced schedule reductions to several regions in Asia, including South Korea and Japan, as well as suspended routes to China and Hong Kong.
The domestic service reductions also include several changes to Canada routes. Munoz and Kirby said that the changes would be announced on March 7.
In addition to the flight reductions, Munoz and Kirby said that employees would be offered the option to apply for a voluntary, unpaid leave of absence, or a voluntary reduced schedule. The airline will also suspend all new hiring through at least June 30, and postponing new-hire training classes.
Finally, the airline will postpone salary raises for management and administrative employees. That excludes employees covered by collective bargaining agreements.
Sara Nelson, president of the union that covers employees at United, the Association of Flight Attendants, expressed satisfaction with the way the airline had handled the impact of the outbreak.
"United Airlines is taking a responsible approach to address the impact of COVID-19 on air travel," she said. "We want to be very clear that the airline has worked with our union from the start to implement safety and health measures to ensure crew and passengers are safe."
"We believe the airline is taking responsible steps for employees and the traveling public," she added.
The ongoing coronavirus outbreak has severely impacted global airlines, including US carriers. Demand to countries with the largest outbreaks has plummeted, but overall travel demand has also fallen. Major corporations have suspended nonessential business travel, and large conferences and events have been cancelled or postponed.
Airlines have introduced a series of flexible ticketing policies and offers to waive change fees in an effort to attract nervous leisure travelers who may be postponing scheduling spring and summer vacations.
United recently said it would postpone a training class for new pilot hires.
US airline CEOs, including Munoz, met with President Donald Trump earlier Wednesday to discuss the impact of the virus on the airline industry.
United was scheduled to hold its annual investor day in New York this week, but postponed the meeting due to uncertainty surrounding the virus.
There have been more than 95,000 cases of the virus, which is believed to have originated in Wuhan, China, reported worldwide in more than 80 countries, including more than 3,250 deaths.
Nearly 150 cases have been reported in the US. 11 of those cases have been fatal.