Airlines warn government aid ‘not a cure’ for coronavirus travel plunge

Business

United Airlines planes at Newark Liberty International Airport

Leslie Josephs | CNBC

United Airlines warned Friday that it expects to reduce its workforce because of the rapid spread of coronavirus and severe measures to stop the disease’s spread, despite a sweeping government aid package that passed the House on Friday.

“The global economy has taken a big hit, and we don’t expect travel demand to snap back for some time,” wrote CEO Oscar Munoz and United’s president, Scott Kirby, who’s scheduled to take the helm next month, in a message to employees.

The message was the latest in a series from executives who do not expect a quick U.S., or global recovery from the coronavirus pandemic. The United States, the world’s largest aviation market, has detected more than 97,000 cases of COVID-19. 

The economic toll is already reverberating throughout the U.S. Unemployment claims surged to a record 3.28 million in the week ended March 21.

United and its competitors have slashed flights, parked hundreds of jets, and asked thousands of employees to take unpaid leave. Executives have warned that even their reduced schedules are drawing few travelers. The Chicago-based airline has cut its April schedule by more than 60% and expects planes to fly less than 20% full or in the single digits in some cases, the executives said.

“And, based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed for months after that, possibly into next year,” they said, adding that they are planning for the worst.

“That means being honest, fair and upfront with you: if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today,” Munoz and Kirby wrote.

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