United Airlines cancels flights and cuts costs as coronavirus hits demand

As virus has spreading around world outlook for airlines has suffered

United Airlines is drastically cutting its flight schedule and implementing cost-cutting measures, in the most dramatic move yet by a US airline in response to depressed demand due to the spread of the coronavirus.

The announcement comes following a White House meeting on Wednesday between the heads of the major US airlines and President Donald Trump to discuss the impact of coronavirus on the sector.

United said 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.

The news came in a joint letter to employees from CEO Oscar Munoz and president Scott Kirby.

Meanwhile, there is a hiring freeze until 30 June, employees are being offered voluntary unpaid leave, and salary increases have been postponed.

“In this uncertain environment, United, working closely with our labour leaders and the US government, has never been better prepared to weather a crisis like this,” said the letter.

CNN said United had already warned investors the crisis had cut virtually all of its revenue on flights to China and Hong Kong during the current quarter, and about 75 per cent on other trans-Pacific flights.

It is uncertain whether other airlines with follow suit as the entire industry reels from the crisis.

“We are continuing to closely monitor the situation and will make any updates as necessary,” said a spokesperson for American Airlines.

The news came as it was reported California had seen its first death from coronavirus, bringing the number of deaths in the United States from the virus to 11. This is the first US fatality outside Washington state.

Also on Wednesday, Congressional leaders in both the House of Representatives and the Senate have reached an $8.3bn bipartisan deal for emergency funding to fight the coronavirus.