United Airlines to Cut Capacity by 50 Percent, Expecting Short-Term Load Factors of 20-30 Percent
In a joint statement released Sunday night, United Airlines CEO Oscar Munoz and company President J. Scott Kirby announced a capacity cut of 50 percent for April and May. Even with the cuts, the carrier expects load factors will drop into the 20-30 percent range.
On Sunday Evening (March 15, 2020), United Airlines CEO Oscar Munoz and company President J. Scott Kirby released a joint statement to company’s nearly 100,000 team members regarding the severity of the impact from COVID-19. The statement explained that in the first two weeks of March, United served more than a million less passengers versus the same period in 2019 and is currently projecting March revenue to decline by $1.5 billion year-over-year. Explaining the austerity measures United has been taking, the statement reads in part,
“Since late January, we have taken steps to aggressively manage this crisis and to keep you informed every step of the way – sharply reducing schedules, imposing a hiring freeze, introducing a voluntary leave program, dramatically reducing discretionary spending, cutting CEO base salary 100% and deferring a salary increase. Our competitors have started to follow suit: on Friday, Delta announced a 40% schedule reduction and a 100% salary cut for their CEO and over the weekend, American said it will reduce its international capacity by 75%. We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck. But, based on the severity of the situation, that no longer appears realistic.”
United is currently in conversations with the unions representing their work groups about how to reduce payroll expenses and the company’s Corporate Officers salaries have been cut by half. Today (March 16, 2020), the company will also announce a 50% capacity reduction for April and May and the carrier further stated, that even with these capacity reductions, they expect load factors to plunge into the 20-30% range or even worse.
United Airlines operates around 4,900 flights daily to 362 airports across six continents. In 2019, the airline in conjunction with their United Express regional subsidiary operated over 1.7 million flights carrying more than 162 million guests to domestic and global destinations. United has the most comprehensive route network in the U.S. with major hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington D.C. The carrier has a fleet of 791 mainline aircraft and regional United Express partners operate a combined fleet of 581 aircraft.
Source: United Airlines
Editor's Note: We stand by the entire United Airlines team and all airlines during this difficult period as the entire world fights to limit the transmission of, and ultimately recover from, the global COVID-19 pandemic. Once it has been defeated, we look forward to the emergence of an even stronger and more robust global commercial airline industry.