United Airlines To Reduce Capacity By 50% For April And May, Cut Corporate Officers' Salaries
CHICAGO (CBS) -- With the coronavirus outbreak drastically reducing the demand for travel, United Airlines announced Sunday that it plans to reduce its capacity by 50 percent for April and May, and cut its corporate officers' salary by 50 percent.
"In just the last few days, the impact of the coronavirus has really hit home and disrupted the daily routines of hundreds of millions of people in the United States and around the world. State and local governments continue to close schools, encourage people to avoid bars and restaurants and cancel more large gatherings," United said. "This weekend, President Trump announced new travel restrictions for the United Kingdom and Ireland. Watching this unfold, you won't be surprised to hear that the impact of the coronavirus on our business has also gotten quite a bit worse."
United noted that March is usually its busiest month of the year, but this year – in just the first two weeks of March – it has seen more than 1 million fewer customers fly on its planes than the same period last year. Revenue projections are also expected to be $1.5 billion lower than last March.
And that is all expected to get worse, United said.
"We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck," United said in a message to its employees. "But, based on the severity of the situation, that no longer appears realistic."
United convened a call to announce the cut to corporate officers' salaries on Sunday evening.
On Monday, United will announce the cut in capacity for April and May.
"We also now expect these deep cuts to extend into the summer travel period. Even with those cuts, we're expecting load factors to drop into the 20-30% range -- and that's if things don't get worse," United said.
The reality, United said, is that it cannot maintain a typical flight schedule given the circumstances.
"When medical experts say that our health and safety depends on people staying home and practicing social distancing, it's nearly impossible to run a business whose shared purpose is 'Connecting people. Uniting the world,'" United said.
