United to reduce flight capacity by 50%, cut corporate officers’ pay
'The bad news is that it's getting worse'
United Airlines executives warned employees on Sunday that the ripple effect that the new coronavirus has had on the airline industry will only get worse for the Chicago-based carrier.
In a memo to employees, United CEO Oscar Munoz and President Scott Kirby said revenue this March is expected to be $1.5 billion lower than the same month last year. In the first two weeks of this month, the airline has had more than 1 million fewer customers than the same period last year, United said. March is typically the busiest month of the year for the company.
“The bad news is that it's getting worse,” Munoz and Kirby said. “We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.”
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United also announced it is cutting corporate officers’ salaries by 50 percent and will announce Monday that it will cut capacity for April and May by about 50 percent.
"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," Munoz and Kirby said.
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The outbreak of the new coronavirus, which causes a disease called COVID-19, is not just impacting United. American Airlines said late Saturday that it is suspending about 75 percent of its long-haul international flights, starting Monday and lasting through May 6, in response to “decreased demand" and U.S. government travel restrictions. The airline did not announce any layoffs but is grounding about 135 planes.
It will continue to fly three routes: One daily flight from Dallas to London, a daily flight from Miami to London, and three per week from Dallas to Tokyo. Short-haul flights to Canada, Mexico, the Caribbean, and Central America will continue.
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On Friday, Delta Air Lines will cut passenger-carrying capacity by 40 percent to deal with a nosedive in travel demand, and it is talking to the White House and Congress about assistance to get through a downturn caused by the new coronavirus.
The 40 percent cut in capacity is the largest in Delta's history, surpassing reductions that were made after the September 2001 terror attacks.
Delta also said Friday it will stop all flights to continental Europe for the next 30 days — possibly longer — ground up to 300 airplanes and delay deliveries of new planes to save cash.
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The Associated Press contributed to this report