United takes ‘painful’ steps to manage coronavirus impact

United Airlines CEO Oscar Munoz and President Scott Kirby explained a number of steps that the company is taking to “aggressively manage” the “impact of the coronavirus” in a letter to employees published online yesterday.

Cutting service and salaries were among the most notable items on their plan.

“We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck,” they wrote. “But, based on the severity of the situation, that no longer appears realistic.”

Effective today, the airline will reduce carrying capacity and officers’ salaries by 50%. The company has also initiated a dialogue with union leadership about “how to reduce our payroll expense in a way that minimizes what we know will be painful for all of us.”

According to Munoz and Kirby, United has “welcomed more than one million fewer customers than the same period last year” and is “projecting that revenue in March will be $1.5 billion lower than last March.”

While sharing the news, the leaders took extensive care to show concern and empathy for the 100,000 employees who will be affected by the measures.  

“We both hate to have to write a note like this, but we have made a commitment to be honest and transparent with you,” they explained. “While it’s now clear that this is going to painful for our people, we promise that you are at the very top of our priority list.”

Several previous actions going back to January preceded the steps announced yesterday. Among them are “reducing schedules, imposing a hiring freeze, introducing a voluntary leave program, dramatically reducing discretionary spending, cutting CEO base salary 100% and deferring a salary increase.”

By Daniel Patton | March 16, 2020

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