United Airlines says the coronavirus outbreak has led to 1 million fewer passengers for the first two weeks of March than the same period a year ago. And, the company says it expects things to get worse, which is why it's slashing its upcoming flight schedule in half.
In a letter to United employees, United CEO Oscar Munoz and President J. Scott Kirby said the company expects March revenue will be down $1.5 billion from March 2019.
United said it had already cut its flight schedule and noted that Delta and American airlines are doing the same. United said it has also already implemented a hiring freeze and introduced a voluntary leave program.
"The bad news is that it's getting worse. We expect both the number of customers and revenue to decline sharply in the days and weeks ahead," Munoz and Scott said.
United will be going further, cutting its April and May schedule by approximately 50%, according to the letter.
"We also now expect these deep cuts to extend into the summer travel period. Even with those cuts, we're expecting load factors to drop into the 20-30% range -- and that's if things don't get worse," the executives said.
Munoz and Scott said conversations have begun with union leaders on how to reduce payroll "in a way that minimizes what we know will be painful for all of us."
"We both hate to have to write a note like this, but we have made a commitment to be honest and transparent with you. 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. We are working night and day on support and ideas to keep as much pay as we possibly can flowing to you -- even if gets worse from here and demand temporarily plummets to zero." Munoz and Scott wrote.
The executives say CEO pay has already been cut 100% and corporate officers would receive a 50% pay cut. United had already instituted a hiring freeze and a voluntary leave program before Sunday's announcement.