The impact of the coronavirus on United Airlines is getting more serious.
The airline is offering pilots of widebody jets involved in service to Asia, which has been pared, the option of reduced pay while not flying. United also postponed a class of 23 new pilots that was due to start this week.
“We have suspended service and reduced capacity to select destinations across Asia and as a result, have worked with our union partners to offer pilots associated with those changes the opportunity to voluntarily adjust their near-term schedules, as we do whenever business needs allow,” a United spokeswoman said. “Moving forward, we will continue to evaluate the impact of (the coronavirus) and work closely with our labor partners to help manage our business to minimize the operational and financial disruption of the outbreak.”
Until now, United has been able to absorb much of the impact of the coronavirus, which first broke out in China around year-end, by moving aircraft and personnel to other routes. But the latest moves show the rapidly spreading impact of the virus into Europe, and the warning from the U.S. Centers for Disease Control & Prevention last week that the outbreak also will be felt in the U.S., is becoming much more serious.
“We are strategically managing our Atlantic and domestic service, mindful of travel directives from the federal government, fluctuating demand and, of course, the advice of public health experts,” United CEO Oscar Munoz told employees Saturday. “Based on current trends, it is likely that additional schedule reductions will be necessary.”
The Air Line Pilots Association, the union that represents United pilots, also said in a message to members: “We are preparing for the possibility of further reductions to our schedules as the virus spreads.”
United also canceled a long-planned meeting with analysts, set to begin March 5, when the airline was supposed to set financial targets for the next three years.
United last week said it was rescinding its previous financial forecast for 2020. Many analysts figured the first quarter, which ends March 31, would be a wash, with additional revenue from a new credit card agreement and reduced fuel costs from falling oil prices offsetting lost ticket sales from reduced flying to Asia. But the spread to European and, potentially, domestic flying, as well, could cause United and other carriers to reduce their financial targets for the year.
The New York Stock Exchange airline index dropped 30 percent last week, more than double the drop of the Dow Jones.
Like other traditional carriers, United has been ramping up hiring to the highest level in decades as it faces a crunch to replace thousands of pilots who will retire in the next 15 years.
“The company made the difficult decision to postpone next week’s new-hire class,” pilots union spokesman Roger Phillips said. “We look forward to welcoming them and thousands more once challenges to our industry caused by the coronavirus are resolved.”
United, which recently said it's buying a flight school, said, "We are on track to open the United Aviate Academy later this year, and our plan to hire more than 10,000 pilots by 2029 remains unchanged."
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March 02, 2020 at 10:14PM
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Coronavirus impact on United pilots - Crain's Chicago Business
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