Wed, July 24, 2024

The Impact of Coronavirus on United Airlines

Aviation and financial results

The aviation industry is struggling to minimize the impact of coronavirus. However, it is a very serious task, even for the largest companies in the world. United Airlines it the third largest airline in the world when it comes to fleet size and route network.

Moreover, United Airlines is a founding member of the Star Alliance, the world’s largest airline alliance. It is worth mentioning that O’Hare International Airport is the largest hub of the company.

However, even for a giant company, coronavirus is a serious threat. World’s some of the largest airlines are working hard to stabilize the situation. One of the solutions is to change their schedules.

United Airlines is slashing its flight schedule by 50% for the next two months. Moreover, United is seeking deep cost savings from its unions.

Also, the United will reduce the salaries of top management executives by 50%. On Sunday, CEO Oscar Munoz and President Scott Kirby sent a letter to the company’s 100,000 employees.

This letter contained other interesting information as well. For example, the letter indicated that United Management began the discussion with the airline’s unions. The company’s management wants to lower compensation costs. Based on the information, employees furloughs, layoffs, or a reduction in pay rates are among the options.

United, as well as other airlines, have to deal with serious financial problems. Airlines have already allowed employees to take unpaid leaves due to the ongoing situation.

It is important to mention that the company is working hard to avoid furloughs. This information comes from a separate letter the airline’s pilots union leadership sent to their members.

Trade Unions and United Airlines

The influence of coronavirus on the aviation

One of the primary goals of the pilots union, as well as the company’s management, is to avoid furloughs. This week union will meet with management again to discuss increasing voluntary unpaid leave as well as other options to minimize the impact on the pilots.

United Airlines already carried one million fewer passengers in the first two weeks of March than a year ago. Moreover, it expects that revenue would fall by $1.5 billion for the month.

Notably, this decision includes the reductions in flights already announced at United. Moreover, United Airlines was the first U.S. airline to announce a reduction in its domestic schedule.

Last but not least, even this decision won’t be enough to solve all the problems. The company expects to fill only 20% to 30% of seats on planes. For example, in 2019, United filled 84% of its seats over the course of the entire year.

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