United Airlines says revenue is down by $100M a day because of coronavirus
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Daily revenues at United Airlines have plummeted along with passenger numbers as travelers heed warnings to “flatten the curve” and stay home amid the novel coronavirus pandemic.
The Chicago-based carrier’s revenue is down by “over $100 million a day” as planes fly with around just 15% of seats filled this week, United president Scott Kirby told employees in a virtual town hall viewed by TPG on Thursday. This comes even as the airline slashes nearly 70% of its schedule in April with further cuts likely for May.
A revenue drop of that much, even with some cost savings, is a dire place for any business to be.
United will seek some of the $25 billion in grants available for employee compensation from the U.S. government, CEO Oscar Munoz said during the town hall. The company also will “consider” applying for some of the $25 billion in loans.
“One of the lessons from this is our stress test from 9/11 wasn’t stressful enough,” Kirby said in reference to United’s preparations and need for cash to keep operating.
Airlines around the world are taking a hit. The International Air Transport Association (IATA) has warned that half of global airlines could collapse or be acquired due to the cash crunch resulting from the pandemic without government aid. Numerous carriers have suspended all but critical routes, idling thousands of jets.
In the U.S., the images of American Airlines, Delta Air Lines, Southwest Airlines and United tails parked at airports across the country is a harrowing reminder of just how quickly the virus decimated air travel.
United has not decided whether to permanently retire any jets as a result of the coronavirus, said Kirby, who emphasized flexibility for the recovery.
“If we want to emerge stronger, if we want to emerge the world’s leading airline on the other side of this, we have to have flexibility,” he said. This includes having aircraft ready to return to service when they are needed.
However, United’s Boeing 757s would be the first to go followed by its Boeing 767s, including the popular “high-J” 767 configuration, said Kirby. The airline would look at retiring some of its Airbus A320 family jets after that.
One positive note: United is likely to keep few of the all-economy regional jets with 50 seats — the Bombardier CRJ200 and Embraer ERJ-145 — after the crisis, said Kirby. These aircraft, while common on routes to small cities, are unpopular with travelers.
The carrier flew 74 757s and 54 767s, as well as 177 A319s and A320s, at the end of December, its latest fleet plan shows. It had 308 50-seat jets in its feeder operation, including 43 with Trans States Airlines that shut down on April 1.
Featured image courtesy of United Airlines.
Welcome to The Points Guy!
Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in the first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants in the first three months of card membership.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Earn 50,000 Bonus Miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
- Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees