United cuts May flights by 90%, tells employees to brace for job cuts
United Airlines Holdings Inc said on Wednesday that it has cut its flight schedule by 90% in May and expects similar cuts for June as a result of the coronavirus pandemic, and warned that travel demand that is now "essentially at zero shows no sign of improving in the near term," making job cuts likely.
United disclosed its outlook in a memo to employees that it publicly released. The memo was from Chief Executive Oscar Munoz and President Scott Kirby.
While the $5 billion that United expect to receive in government payroll support under the CARES Act bars its from involuntary furloughs before Sept. 30, the airline indicated that it expects to have to cut payroll after that. It said it will be offering new voluntary leave packages in the coming weeks and voluntary separation programs.
United said that the government money does not cover its total payroll expense, and noted that payroll is only about 30% of total costs, which also include airport rent and supplies.
United's efforts to further cut payroll costs are similar to moves by peers Delta Air Lines Inc and American Airlines Group Inc.
United is among airlines eyeing a separate $25 billion federal loan package for U.S. passenger carriers given expected favorable terms, Reuters reported on Wednesday.
https://www.foxbusiness.com/markets/united-cuts-may-flights-by-90-tells-employees-to-brace-for-job-cuts