Coronavirus: United CEO and president both forgo salaries as deep drop in demand rocks airlines
Airlines across the world are cutting capacity as an industry group predicts that the financial impact might be as high as $113bn
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Your support makes all the difference.United Airlines says that its CEO and president will forgo their bases salaries through until the end of June, CNBC reports, as airlines are shaken by the impact of the coronavirus.
Passenger fears have hit demand, and the United has already announced dramatic cuts to its schedule both domestically and internationally. JetBlue, American Airlines and Delta Air Lines are making similar cuts.
The International Air Transport Association (IATA) has updated its analysis of the financial impact of the coronavirus on the global air transport industry, now seeing 2020 global revenue losses for the passenger business of between $63bn, in a scenario in which the outbreak is contained, and $113bn, in a scenario with a broader spread of the virus.
United announced it would cut its North American flight schedule by 10 per cent in April, and its international schedule by 20 per cent. These cuts would likely last up and beyond May, and depending on demand.
Delta is making the biggest cuts to capacity, announcing on Tuesday that it will reduce international flights by as much as 25 per cent and domestic capacity up to 15 per cent. These cuts include up to a 20 per cent drop in Transatlantic services and a 65 per cent reduction to routes across the Pacific.
American will cut 10 per cent of capacity from its peak summer schedule, including slashing 55 per cent capacity from flights to Asia. Flights to mainland China were halted several weeks ago, and that will be extended until October. The airline is suspending routes from the US to Rome, Milan, Venice, Madrid, Barcelona and Paris. In April, domestic capacity will be cut by 7.5 per cent.
JetBlue is cutting its schedule by 5 per cent and will continue to monitor the situation, making adjustments where required, depending on demand.
Southwest Airlines CEO Gary Kelly will take a 10 per cent pay cut, but to date the airline has not cut any flights of routes.
Airlines and travel companies across the world are suffering due to falling passenger numbers — most notably the collapse of FlyBe in the UK. Elsewhere, China's largest online travel company, Trip.com, has announced that its CEO and chairman will both stop taking a salary, and senior management will take voluntary pay cuts. Lufthansa and Qantas are also planning to ground their fleets of Airbus A380s as part of their capacity cuts.
The Trump administration intends to support the travel industry through this challenging time, working with airlines, hotels, and cruise lines. It is unclear what a support package might look like.
The airlines and the administration are currently feuding over access to passenger data which the Centres for Disease Control and Prevention say will help stem the spread of the virus. The airlines say that they do not have the technology available to meet the government's requests.
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