A United Airlines passenger jet takes off with New York City as a backdrop, at Newark Liberty International Airport, New Jersey.
Chris Helgren | Reuters
United Airlines said Wednesday that it will reduce the number of April flights and suspend hiring and salary increases amid the global coronavirus outbreak that has hurt travel demand.
United will cut its international flights scheduled for next month by 20% and those in the U.S. and Canada by 10%. Some wide-body planes will be parked, the company said Wednesday.
New hiring will be suspended through “at least” June 30, “except for roles that are critical to our operation,” the airline said.
CNBC previously reported that the airline postponed start dates for new pilots, offered some pilots a month off at reduced pay, and warned employees about further flight cuts beyond the reductions in Asia flights it announced last week.
The changes are likely to be followed by similar moves at other airlines, which are facing the biggest demand shock since the financial crisis, as the coronavirus sickens more than 90,000 people.
“We sincerely hope that these latest measures are enough, but the dynamic nature of this outbreak requires us to be nimble and flexible moving forward in how we respond,” United CEO Oscar Munoz wrote to employees on Wednesday.
United shares fell after its announcement but later recovered, closing up 2% on the day, less than its competitors’ percentage gains in the session.
Airlines around the world have cut back on capacity as COVID-19 saps travel demand. The coronavirus outbreak, which originated in China, has spread to dozens of countries, prompting large companies to scale back on business travel.
Companies such as Target and Google have turned to webcasts instead of in-person gatherings, and several high-profile conferences have been canceled. Companies including automakers Ford and Fiat Chrysler have banned nonessential travel.
The hiring freeze is a sharp turnaround. Airlines have ramped up hiring of pilots and other employees in recent years as they faced increasing demand. Last month, United announced the purchase of a flight-training academy, the United Aviate Academy, to train its future pilots, as more of its aviators reach the federally mandated retirement age of 65.
“Our highest priority is to ensure the long-term job security and safety of our pilots,” said Roger Phillips, spokesman for United pilots’ union, the Air Line Pilots Association. “The company is taking proactive steps to address the decline in travel demand.”
Sara Nelson, a United flight attendant and president of the Association of Flight Attendants, which represents cabin crews across more than a dozen airlines, including United, said flight attendants’ contracts include pay protections and benefit retention for those affected by the flight cuts.
“As the leadership of the airline noted last week, the company has never in its history been better positioned to withstand this economic uncertainty,” Nelson said in a statement. “We believe the airline is taking responsible steps for employees and the traveling public.”
The union is seeking greater protections for flight attendants at various carriers to combat the illness.