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United Airlines scales back August schedule on resurgent coronavirus, travel restrictions

July 07, 2020
6 min read
United Airlines stock
United Airlines scales back August schedule on resurgent coronavirus, travel restrictions
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United Airlines is scaling back plans to fly 25,000 flights in August as the coronavirus pandemic continues to spread across the U.S.

The Chicago-based carrier now plans to fly about 35% of the what it flew a year ago in August, United disclosed in a securities filing on Tuesday. This is down five-points from the plan unveiled on July 1 to fly 40% of what it flew a year ago.

United cited the rise in COVID-19 cases across the U.S. and new travel restrictions for the roll back of its planned schedule. The cuts were first reported by Reuters.

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Asked about the rising number of infections and new travel restrictions during a media briefing on July 1, United's vice president of domestic network planning Ankit Gupta called the situation part of the "ebb and flow" of the coronavirus pandemic.

“We are being extremely flexible in being able to move our capacity around," he said indicating that the airline could adjust its plans if necessary.

United's decision to scale back its August plans is not a surprise. The U.S. has set new daily records for COVID-19 infections since June, especially in states in the South and West that reopened quickly from their initial coronavirus closures. Delta Air Lines CEO Ed Bastian acknowledged this in an employee town hall on June 25 where he said the carrier could trim its own August schedule.

Related: Delta likely to pull flights as number of US coronavirus cases rises

One place where United may downsize its August plans is Newark (EWR). In a presentation on July 6, the airline indicated that net bookings for travel originating or ending at the airport were down 84% year-over-year, or 11 points lower than for travel elsewhere. The drop is attributed to the mandatory 14-day quarantine in Connecticut, New Jersey and New York for travelers coming from states with rising coronavirus infections.

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More Newark flights were a highlight of United's August ambitions. The carrier planned to double the number of peak day departures to roughly 200, including resuming flights to places ranging from Bozeman (BZN) to Orange Country (SNA) and Syracuse (SYR).

Those route additions from Newark are now in question though United has not indicated where it will scale back on planned flights.

Related: United doubles Newark flights, adds 9 long-haul international routes in August

United executives also indicated that the airline may hold capacity at August levels through the end of year, according to the filing. This is in line with warnings from Wall Street who have said the recovery in some leisure travel this summer is unlikely to continue into the fall when business travel typically picks up.

Most corporate flyers remain grounded as companies hold off on travel during the pandemic.

“With COVID and other airlines’ expansion, I’m pretty bearish on the fall,” Sun Country Airlines CEO Jude Bricker told TPG as part of the CEO chat series this week. "September is going to be rough."

Related: Sun Country fears a ‘rough’ September as travel uptick plateaus

Separately, United plans to begin sending notifications to staff of possible furloughs or layoffs this month. The notices, required under the federal Worker Adjustment and Retraining Notification Act or WARN Act, are a prelude to a cull in the airline's workforce in October.

Delta has sent similar notices to more than 2,500 pilots, and American Airlines is expected to send them to as many as 8,000 flight attendants. Airlines cannot let go of staff until after employment protections under the federal government's coronavirus aid package, or CARES Act, sunset on Sept. 30.

Wall Street analysts have repeatedly warned that the pandemic will force airlines to shrink their workforces. Cowen has estimated that as many as 100,000 staff could lose their jobs because of the coronavirus.

Related: United undeterred in August expansion by rising US coronavirus infections, EU ban

Featured image by PA Images via Getty Images