Here’s How United Airlines Is Reducing Payroll Expense

United is farthest ahead preparing for the worst as a business. They are cutting capital spending, slashing flying, and eliminating discretionary expenses. They have raised additional cash and assume that their revenue is down 70% in April and May and not fully recovering this year. We don’t know yet if things will be even worse than this, and more drastic measures will need to be taken.

For now there aren’t any layoffs, but United is trying to reduce personnel spending and they’ve imposed a hiring freeze so that retirements will reduce their head count. Here’s the detail of the United Airlines voluntary leave plan from always-in-the-know JonNYC:

Even if a U.S. airline cannot make it through the current crisis there should be no bailout of shareholders. There’s no systemic risk to the economy of an airline bankruptcy. Indeed we’ve seen the major U.S. airlines all fly through bankruptcy without significant disruption.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. My Phoenix based UA flight attendants last night were worried about all the TATL FAs driving down work availability for everybody across the board. Hope some people take voluntary leave…

  2. @ Gary — I’m sure that DJT thinks shareholders (campaign donors) are the most important stakeholders, after himself of course.

  3. For the many contractors that make up the majority of the IT team at WHQ, the news isn’t as rosy.

    Massive reductions are rolling through as the department manages to a 50% cost reduction mandate (pre travel ban). The number may be even higher as Transatlantic traffic declines.

  4. UA and DL will be hurt the most by the level or asian and european connectivity they rely on for their US traffic. Good news is that the airlines are in better financial positions then in the past (aka 9/11 or 2008). The recovery will take a while for sure. Airbus and Boeing will see a ton of order cancellation of deferrals that will ripple through the global economy. Ray of light is China is starting to recover now and the US (and don’t start the liberal testing bs) and the Americas seem less hit and having fewer deaths overall.

  5. @sunviking – you DO understand that the US is likely well underreported in cases due to the existing occupant of the WH’s general leadership incompetence with respect to the CDC, right?

    Hard to document the number of cases out there when…the cases aren’t being documented due to inefficient distribution of the kits

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