United Airlines will slash 50% of its flying capacity in April and May and warns the cuts could extend into the peak summer travel season as the impact of the new coronavirus on airlines grows more dire.
Bookings are plummeting and cancellations soaring as the virus continues to spread and claim more lives. United said Sunday night it expects planes to be only 20% to 30% full at best, down from nearly 90% before the virus hit.
The airline handled a million fewer passengers in the first two weeks of March than it did a year ago, and it expects March revenue to fall $1.5 billion below the year-ago pace, CEO Oscar Munoz and President Scott Kirby said in a letter to employees.
“The bad news is that it’s getting worse,” they wrote. “We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.”
United’s management is talking to pilot and flight attendant unions about taking cuts in pay or hours.
Munoz said he has spent two days in Washington, D.C., exploring possible federal aid to the airline industry. The company offered no specifics on what the aid might look like.
United and other airlines have already cut back passenger-carrying capacity.
American Airlines announced late Saturday that it was suspending about 75% of its long-haul international flights, starting Monday and lasting through May 6, because of falling demand and U.S. government restrictions on travelers from most of Europe. American expects to cut U.S. flying by 20% in April and 30% in May.
American did not announce layoffs but plans to ground about 135 planes.
American will keep flying three international routes: Daily flights from Dallas to London and Miami to London, and three flights per week from Dallas to Tokyo. Shorter international flights to Canada, Mexico, the Caribbean, and Central America will continue.
Appearing on ABC’s “This Week” Sunday morning, Treasury Secretary Steven Mnuchin called the impact on the airlines and other travel industries unprecedented. Cruise lines have agreed with the Trump administration to suspend all sailings from the U.S. for 30 days.
Mnuchin indicated that one of the next steps for the federal government is to provide assistance to travel-related industries.
RETAILERS CUTTING BACK: A growing list of retailers are closing stores or limiting their operating hours as customers remain home in an effort to slow the spread of the virus outbreak.
Walmart, the nation’s largest retailer and private employer, said late Saturday it is limiting hours to ensure stores can keep sought-after items such as hand sanitizer in stock.
Beginning Sunday, more than 4,700 Walmart and Neighborhood Market locations in the U.S. will be open from 6 a.m. to 11 pm. until further notice. Most super center stores are typically open 24 hours while some Neighborhood stores are as well.
“I don’t think any of us have been through an experience like this, and we continue to be amazed at what people, whether in the stores or in the supply chain, are doing to make sure customers have what they need,” Dacona Smith, chief operating officer, said in a statement.
Other retailers are following Apple and closing their stores, including Urban Outfitters, Everlane and Patagonia.
“This is a critical moment in the world,” Everlane posted on its website. “With the situation evolving very quickly, we must do our part in slowing the spread of COVID-19”. Everlane says it will keep its online operations open, while Patagonia is closing down both its website and stores.
INFECTED EMPLOYEES: Supermarket chain Kroger said two of its employees have tested positive for the COVID-19 virus and are recovering. One was employed at the King Soopers grocery chain in Colorado, and the other at Fred Meyer, a grocery chain in Washington state. Both are subsidiaries of Kroger’s.
The company also said it has enacted an emergency leave policy that allows for paid time off for workers diagnosed with the coronavirus and those placed under a mandatory quarantine by a doctor or public health authority.