United Airlines warns staffing cuts to come as it slashes May flying by 90%

Apr 16, 2020

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.

United Airlines executives warned of further capacity and staffing cuts to come Wednesday, just a day after the company accepted payroll assistance from the U.S. government’s $2 trillion coronavirus bailout package.

The Chicago-based carrier will dramatically cut capacity with plans to shrink its network by roughly 90% in May, United CEO Oscar Munoz and president Scott Kirby told staff in a letter Wednesday night. But the flying reductions are only the supply-half of the picture.

“Travel demand is essentially zero and shows no sign of improving in the near-term,” they said. “We expect to fly fewer people during the entire month of May than we did on a single day in May 2019.”

Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.

Traffic on U.S. carriers was down 97% year-over-year during the seven-days ending April 12, according to Airlines for America (A4A). The industry group draws data directly from member airlines, including United and other majors American Airlines, Delta Air Lines and Southwest Airlines.

International Air Transport Association (IATA) director general Alexandre de Juniac has called the impact of COVID-19 on the industry the “biggest crisis we have ever had in front of us.”

The U.S. government set aside $50 billion in aid to get airlines through the crisis in the bailout package known as the CARES Act. At least 10 carriers have received payroll assistance funds, including $5 billion for United. As a condition of the aid, airlines cannot involuntarily furlough or layoff staff through Sept. 30.

Once those protections lift, Oct. 1 stands to be a dark day for many airline employees across America.

Related: US airlines’ first bailout aid was tougher to get and came with more strings than expected

“The challenging economic outlook means we have some tough decisions ahead as we plan for our airline, and our overall workforce, to be smaller than it is today, starting as early as October 1,” Munoz and Kirby said Wednesday.

More than 20,000 employees at United have already taken voluntary unpaid leave, they added.

Ed Bastian, CEO of Delta, has similarly warned of the likely need to right-size the carrier’s staff along with its operations later this year.

“I think this industry is going to be smaller for some period of time here as we build back, and I don’t know what that pace of recovery will be,” Bastian told employees on April 8. “It will really be dictated based on when customers feel safe to travel again in large numbers.”

Related: United Airlines says revenue is down by $100M a day because of coronavirus

As many as 125,000 airline staff could be furloughed or laid off if the industry contracts by roughly 30%, Cowen analyst Helane Becker estimated in an April 13 report. That could mean up to 27,000 people lose their jobs at United, and another 25,000 at Delta.

“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,” Kirby told employees during a virtual town hall on April 2. But that flexibility will likely mean economic pain in the form of unpaid leave or fewer hours for many in the short term.

Featured image courtesy of United Airlines.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases within the first three months of card membership. Plus, earn a $200 statement credit after your first Delta purchase within the first three months. Offer ends 7/28/21.

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.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles after spending $3,000 in purchases on your new Card in your first 3 months and a $200 statement credit after you make a Delta purchase with your new Card within your first 3 months. Offer expires 7/28/2021.
  • Limited Time Offer: Plus, get a 0% intro APR on purchases for 12 months from the date of account opening, then a variable 15.74%-24.74%. Offer expires 7/28/2021.
  • Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
  • 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.
  • 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
Intro APR on Purchases
0% on purchases for 12 months
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.