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United Airlines cuts capacity by half through at least May
Edward Russell
Contributor
Edward Russell is a contributor for TPG. An AvGeek at heart, he covered the airline business at FlightGlobal for eight years and previously covered finance in New York and Hong Kong.
March 16, 2020
•
3 min read
United Airlines cuts capacity by half through at least May
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United Airlines will slash capacity this spring with CEO Oscar Munoz saying the coronavirus crisis for the carrier is severe and "getting worse."
The Chicago-based carrier will halve its capacity in April and May with cuts likely to extend into summer, Munoz and United president Scott Kirby told employees in a memo on Sunday night. The airline is also in talks with its labor unions to reduce its payroll, and corporate officers will each take a 50% pay cut.
Details of the capacity cuts will be released on Monday, they said.
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"Together, we're facing an unprecedented challenge," said Munoz and Kirby. They added that the crisis continues to get worse.
At the beginning of March, United was the first U.S. carrier to cut system capacity as the first signs that domestic air travel would take a hit from the novel coronavirus COVID-19 pandemic. However, those initial cuts of up to 20% appear have proved too little based on Munoz and Kirby's comments and the actions of other airlines in the days since.
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On March 14, American Airlines said it would cut international capacity by 75% and U.S. capacity by 20% through May amid the crisis. And Delta Air Lines, on March 13, unveiled a systemwide 40% capacity cut and plans to ground up to 300 aircraft.
Related: United to extend coronavirus-related capacity cuts into summer
These cuts come as other airlines around the world taken even more drastic measures. Royal Jordanian has suspended all of its operations during the second half of March while others, such as SAS Scandinavian Airlines, have suspended the bulk of their flight schedule.
United, in an example of how severe the drop in air travel is, told employees in the memo that it expects passengers in only 20% to 30% of seats on its flights in April and May even after the cuts.
For comparison, the Star Alliance carrier filled 86% of its seats during the three month period from April to June 2019.
Munoz and Kirby did not say what the 50% capacity cuts would mean for United's fleet. However, based on the plans from American and Delta, the airline is likely to park a significant number of jets.
Related: US airlines could retire older aircraft, focus on newer models due to coronavirus downturn
Featured image by NurPhoto via Getty Images
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- Packed with credits foodies will enjoy
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- 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.
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- Annual Fee is $325.
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