United Airlines laying off 13 senior Executives

Air travel

United Airlines is laying off 13 of its senior executives out of 67 executives. 

The company has 93,000 employees.  They are taking this step to further cut costs, as there is still low demand in air travel. This lay off will be effective from October 1st, as the airlines cannot lay off and make pay cuts until September 30th, as directed by the state aid terms.

United Airlines President has said that travel demand is zero due to Covid-19 and it will remain the same for the year 2020, and may extend out to the year 2021. The airline incurred a loss of almost $2.1 billion in the start of the year and its profit reduced by 17% in the year. 

Major Layoffs by Airline Industry

As airlines have borne major losses due to the Coronavirus, the first quarter business revenues of United Airlines have been lowest. Air travel was at a complete standstill as the pandemic affected the people globally. The Airline officials believe that it will take years for the airline industry to recover.

American Airlines also laid off its management and support staff to cut costs. They let go of 30% of their staff. There are about 17,000 employees in airline management and support staff. The airline survived in bearing the costs with the help of government bailouts and the cash raised by the airline.

Boeing also laid off about 10% of its employees. Boeing is offering voluntary layoff to its employees who want to quit their services with pay and benefits packages.

Memorial Day Spike

Presently, the travel industry is at a halt. But the airlines presume that situation might change in the coming months. As on the Memorial Day weekend, more than 1.5 million travelers went through the airport security checkpoints. But in comparison with 2019, this was a low number of passengers traveling on Memorial Day weekend.

Airlines such as Delta and Southwest also stated that they have seen a change in the last few weeks that people are booking more than canceling the flights as compared to March and April. Southwest said there is a drop in flights by 60% – 70% and a drop of 85% – 90% in revenue as compared to May 2019.

But for June there will be a drop of 45% – 55% as compared to last year. This reduction is lesser than what has been forecasted earlier.

 United Airlines expects an increase in demand for the coming months for its domestic and some international flights. United predicts its bookings to be reduced by 75% than last year which is better than the reductions in the booking of May and June.  

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