United Airlines slashes schedules by up to 20% amid coronavirus slowdown
United Airlines is the first U.S. carrier to unveil broad cuts across both its domestic and international network because of rapid changes in travel demand as the COVID-19 coronavirus outbreak continues to spread.
The Star Alliance carrier will cut international schedules by 20% and domestic schedules by 10% in April, outgoing CEO Oscar Munoz and president Scott Kirby said in a joint letter to employees on Wednesday. Similar schedules reductions are expected in May, the last month before the peak U.S. summer travel season is due to really ramp up.
What's more, United is also offering employees voluntary unpaid leave, suspending hiring through June 30, and postponing any pending salary increases for management and administrative personnel until July 1.
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"A lot has changed since this weekend," wrote Munoz and Kirby. "Due to decline in demand flowing from the impact of COVID-19, we’re taking additional steps to reduce our international and domestic schedules."
United will release specific flight reductions on March 7. However, the reductions will include trimming the number of flights on routes with multiple frequencies, ending select routes to cities with nonstop flights to multiple United hubs, and delaying the start of planned seasonal routes.
A likely scenario is planned new services -- such as the shuttle schedule between Newark Liberty (EWR) and Washington Reagan National (DCA) that was due to begin on March 29 -- possibly being put on hold for the time being. New seasonal routes to Nice, France (NCE), and Palermo, Italy (PMO), due to begin in May could also be delayed.
Munoz and Kirby added that the reductions will be made in a way that avoids "closing any domestic stations."
Related: A guide to traveling during the coronavirus outbreak
United's schedule reductions do not come as a surprise. Airlines outside of the U.S. have already slashed flights and parked aircraft amid a precipitous drop in demand that has hit Asia the hardest.
"This really illustrates the serious -- that's serious with a capital S -- impact COVID-19 is taking on airlines," Atmosphere Research president and founder Henry Harteveldt told TPG. The industry has not seen the rapid schedule reductions outlined by United, and already underway at other carriers, since 9/11, he added.
Following 9/11, air travel was grounded in the U.S. for four days and airlines scrambled to stay solvent in the weeks that followed. United, for example, slashed more than a quarter of its global capacity and parked its entire Boeing 737-200 and 727-200 fleets -- nearly 100 aircraft -- following the attacks.
Harteveldt said he expects United to temporarily park several dozen aircraft as part of the schedule reductions.
Related: Could the coronavirus end the decade-long U.S. airline expansion?
It comes as U.S. airlines have seen an unprecedented period of passenger growth since 2010. During the decade, domestic traffic numbers grew by nearly a third to 1.01 billion in 2018, the latest U.S. Bureau of Transportation Statistics data shows.
COVID-19 looks set to halt what had been a seemingly endless upward passenger number track. January data from industry trade group International Air Transport Association (IATA) shows passenger growth slowing, even though the majority of travel restrictions to China were not put into place until the end of the month.
“January was just the tip of the iceberg in terms of the traffic impacts we are seeing owing to the COVID-19 outbreak," IATA director general and CEO Alexandre de Juniac said in a statement Wednesday.
American Airlines, Delta Air Lines, Hawaiian Airlines and United have all reduced schedules to Asia and Italy. However, only United has taken the expected next step of domestic schedule reductions. But other airlines are expected to make similar moves, though by how much and where remains to be seen and will likely depend on the changes in travel demand they see.
Related: Delta considers early MD-88, MD-90 retirements as possible coronavirus response
Spirit Airlines CEO Ted Christie, speaking at an investor conference held by Raymond James on Tuesday, said the carrier had seen an uptick in sales of its lowest fares since last week. He added that it had not seen any broad decline in demand that could be attributed to COVID-19.
As of noon on Wednesday, the Centers for Disease Control (CDC) reported 80 cases of COVID-19 and nine deaths in 13 states across the U.S.
For more on the coronavirus outbreak, see:
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- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.