United Airlines (NASDAQ: UAL) CEO, Oscar Munoz and president J. Scott Kirby have issued a message to United´s nearly 100,000 employees regarding the impact of the coronavirus on the company´s business and the steps the airline is taking to manage it, the company said.
The statement addressed the impact of the virus on United´s business has become worse with the new travel restrictions for the UK and Ireland. Munoz and Kirby said they feel an obligation to run the company in a way that protects the employees and to be open about the decisions facing the airlines.
The United leaders acknowledged March as its busiest month of the year, but is projecting that revenue in March 2020 will be USD 1.5 billion lower than last March.
United has taken steps to manage the crisis by reducing schedules, imposing a hiring freeze, introducing a voluntary leave program, reducing discretionary spending, cutting the CEO base by 100% and deferring a salary increase. Competitors have started to follow suit.
The airline said it will begin conversations with union leadership about reducing payroll expense. Corporate officers have been informed their salaries will be cut by 50%.
The company has announced a 50% cut in capacity for April and May and expects cuts to extend into the summer travel period. And with those cuts, load factors are expected to drop into the 20-30% range.
Together, United and United Express operate approximately 4,900 flights a day to 362 airports across six continents. In 2019, United and United Express operated more than 1.7 million flights carrying more than 162 million customers.