Coronavirus devastating the airline industry; United announces plans to slash thousands of jobs

CHICAGO (WLS) -- The airline industry has never been hit so hard. United Airlines is the first major carrier to announce plans to get rid of thousands of jobs, many of them here in Chicago. On Tuesday, Delta said it will be limiting seating on its planes to minimize crowding.

"For more perspective, this is not only worse than 9/11, or SARS, or the recession, or any other past crisis, it's worse than all of them combined. It's bigger than 9/11; the very big difference in this time is that back after 9/11, it was considered patriotic to go get on an airplane again whereas, in this case, you have health authorities telling us, don't fly," said Seth Kaplan, air travel analyst.

United said it plans to cut nearly 3,500 management and administrative jobs in the beginning of October. Many of those employees work at the company's headquarters in the Willis Tower. Some employees will be required to take 20 unpaid days off over the summer. The airline reported a $1.7 billion first quarter loss.

"We're certainly going through a challenging time, there's a lot of uncertainty. We do expect that even if demand starts to recover over the summer, there's no guarantee that will happen. We will have to size the airline to meet demand, and so we are likely to be smaller," said Josh Earnest, Chief Communications Officer for United Airlines.

A voluntary separation package will be offered to some employees in mid-May. United said it is looking to become a leaner company due to the pandemic.

"This is the worst financial crisis to ever strike our company in our 94 year history. And it is why we are doing everything we can now to try to strengthen the company for the long haul. Make sure the company is here and the jobs that it supports are around once demand fully recovers," said Earnest.

Delta is the first airline to implement blocking more than just middle seats. Seating will be limited to 50% in first class, 60% in the rest of the plane. These seating arrangements will be put in place until at least the end of June. Other carriers are likely to follow.

"Airlines and airports are just not set up for social distancing. I think what we're going to see here are a lot of new procedures put in place, and then gradually they'll ease up on some of them once there's a vaccine," Kaplan told the I-Team.

United is receiving about $5 billion through the COVID-19 relief package, part of which is to protect jobs. However, United executives said that money will not cover payroll through the end of September, and they have already been taking steps to cut salaries.
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