United Airlines CEO Paints Grim Picture Of Future

It is obvious that we all have our "opinions" about how CEOs and leadership of the airlines should be responding and reacting to the decline in flying due to the COVID-19 pandemic. It is also obvious that opinions are just opinions, unless there are facts that support the claim and/or there is at least some level of expertise to back up the claim.

It is no secret that there are many different leadership styles, and it is also not a secret that more than one has potential to be successful. It is akin to parenting; what the model looks like depends on how the issues are mitigated. I would like to give all leadership, with the major carriers in conversation, the benefit of the doubt. Based on the dynamics of each carrier, I believe each is doing his best to protect and serve the employees and legacy of that carrier. What I do admire the most, though, is a positive outlook and prudent, creative ways to mitigate the circumstances, i.e., boosting morale AND getting to the heart of the matters at hand.

On another note, I encourage everyone that is only looking at UA pilot pay to look also at the entire industry. It is obvious that pilot salaries at other legacy carriers are the same, and some even higher. For those that believe pilot pay is inflated, when you fly, I ask you to consider that you entrust them with your life. They deserve to be compensated for the responsibility they bear every time they get in the cockpit.

My husband is a pilot for one of the major airlines; the minimum flight hours to become an ATP (air transport pilot), airline pilot, is 1500 hours (training for these costs, estimated at a relatively low cost, is approximately 1500 X $100/hr = $150,00). But, and fortunately for passengers' and crews' sake, he had approximately 4,000 hours when he was hired (and some of this was military flying where he spent much of his time upside down and out of control with combat flying...not a requirement to be an ATP pilot...but a plus for the safety aspect of the job). This is just one component that is required, and for which accounts for training at a high cost. Other requirements are as follows: Bachelor's degree, physically fit, expert hand-eye coordination, coachable/teachable spirit, ability to think on the fly due to a dynamic, rapidly changing environment (because a pilot's office moves 600 MPH!!!), strong communication skills, weather expert (because this DOES affect flying...and, at times, mid flight), aerodynamics expert, and mechanical expert (because when something goes wrong, it is necessary to know mechanics in order to mitigate issues). In addition, just 90 days of not landing an airplane, the FAA requires a pilot complete training just to be able to fly again; every 9 months, the FAA requires emergency training (engine failures, hydraulic system failures, pressurization failures, and the like) and security threat training.

Depending on the company a pilot works for, yes, there is immense earning potential. And, while some pilots are paid well, their level of expertise also comes at a high price, literally and figuratively. And, to the average individual, a pilot's job is mundane and relatively easy. After all, he/she can just engage auto pilot, to sit back and enjoy the flight...NOT!!!!!!! Pilots don't get paid for what they DO; they get paid for what they CAN DO!!! For just a couple examples, because there are too many to mention, research of UA Flight 232 and more recently, US Airways Flight 1549, supports this. The rigor of a pilot's job is inconceivable to most, and for those that see it as these individuals are overpaid and not really earning their paycheck, I say, go try it.

He is doing something that is rare amongst any corporation. He is telling the TRUTH! It doesn’t take a crystal ball to see that this will last long past October.
The stimulus package prevents them from laying off workers for a period of time.
His honestly allows those who will be affected to prepare for the inevitable. Why would he be criticized for this? American CEO Parker’s approach is dishonest yet the status quo amongst most corporations.
I would appreciate a six month heads up rather than a swift kick in the nuts come Oct 1st.
Anyone critical of this approach lacks common sense and compassion in these troubled times and clearly has zero knowledge of what a fine line the airline industry rides just to stay in business.
I applaud Oscar for his honesty.

@Janet Thanks for joining the argument but - as pointed out above - COVID patients don't kill healthcare workers by the hundreds. My point is that the number of deaths sounds high but isn't high compared to other metrics. In particular the number of old people or people with previous diseases that would have died even without the virus is higher than most imagine. The only smart compromise we have is to be at a point where the healthcare system operates at its maximum and all capacities are being used.

"What disease kills 35,000 people in just 2 months? Project that over a year…." That's just over 200.000 deaths a year. In comparison 650.000 die from heart disease alone, 600.000 from cancer. Some of the 35.000 people who have died MAY have died even without the virus. The "baseline" deaths obviously need to be factored in..

Dave makes a great point. From reporters wearing face masks on the news to saccharine commercials (especially looking at you, Facebook and Walmart, it's clear that our society right now is more focused on "feel good" measures rather than actually looking at data. A homemade cloth mask is essentially worthless but someone people are now getting shamed in the streets for - gasp - going on a run while not wearing a used t-shirt over their face. But how many people die each year from smoking or car accidents? In a few months the news will be filled with sob stories of restaurants and salons that went out of business. I applaud the people who are pushing back against state shutdowns. I disagree with the confederate flags used in Michigan but isn't it a little too much when the governor won't allow people to buy garden or home improvement supplies? It's bad enough that we're stuck at home but to not be able to plant a garden? Especially given shortages in grocery stores? It's a sad state of affairs when our societal coping mechanism is sewing worthless homemade masks and guilting the people who are still trying to live a normal life and support the business that we depend upon.

You know @Jamie, I get your point. This is not something to be making fun of. But look at the death stats in the US. Almost 500k people from traffic, 500k from smoking every year. Many thousands from gun violence. Isn't it ironic that that smoking is still allowed, guns are still readily available for everyone and all it takes to get a drivers licence is two feet and the application fee? If you knew how many people die while intubated, whether its in the OR, in the ER, in the ambulance or on intensive care, you wouldn't make COVID deaths such a big deal. I know it's hard to rely on facts in such an emotional matter and being factual are easily mistaken for being cold or heartless. If it were up to the people who are crying about COVID and how bad Trump is every day, they would shut down the economy forever and then turn around wondering why everybody is unemployed, depressed and the first riots start.

For those who think that the pilots make too much and should be taking pay cuts instead of the less senior or poorer employees, shut up! THEY HAVE TAKEN PAY CUTS! Along with the flight attendants, and others as they are ALL paid hourly, and when the capacity is cut, they cant fly over guarantee which is essentially a pay cut. They are all getting paid guarantee thsts 65-75 fllight hours a month. No extras . And stop with the hate on higher earning people. They've most likely worked hard for it!

This is playing into Scott Kirby’s master plan when he and Oscar shocked Wall Street with the aggressive growth set out in 2018 of 6%-7% annually. But, there was an internal price for that growth; flat headcount growth and not backfilling many vacated positions. So, you can bet that every group VP is having his or her management and admin folks being looked at with a magnifying glass to be ready to be shown the door come October 1st.

We know not every job would be saved with this pandemic but, Scott is going to use this to his full advantage to cut without regret.

This is the c-suite being a big ninny baby. I don't hear other airlines complaining like this. As you said Ben, Parker gave a much better outlook yesterday. Does UA think that people will not return to them after this is settle? Likely. Can you blame the flying public for not wanting to deal with UA? I certainly have zero intention of flying them based on the actions the company has taken to punish customers and hoard their cash.

I feel bad for the employees. Management at UA have punished customers, even their most loyal customers by destroying their mileage program, punishing their best flyers, and hoarding cash from all customers recently. It is no surprise that no one wants to fly them. This is all squarely management's fault. Heck, I'm often critical of AA, but they generally do the reasonable thing. Not UA.

Let the company go into bankruptcy, clear the entire management suite and board. Bring back Continental and start over with a single person above middle management involved.

Doug came from US Airways. It wasn't Spirit, but it wasn't AA standards. However, coming out of 9/11, US Airways took a different path than AA, UA, and DL. While those three competed for for high end spenders, US Airways offered a generic, more budget friendly low cost "first class". Basically, they'd fly you where you needed to go and all you were paying for is to get from point A to point B with a no frills bigger seat up front for a lot less than the big 3. After the LUS/LAA merger, LUS was trying to join "the big 3" with upgraded service standards and amenities (though it's been a rocky path). With that being said, Doug will revert back to US Airways standards if need be to keep the company afloat. He will have no problems offering Juice & water service in main for however long it needs to be to keep the company going. He will consolidate positions in corporate to erase all the overlap. Minus LAX and NYC, the hubs are cheaper to operate than other cities (and even speculation that LAX and NYC will be downgraded in the future. AA has never been able to capitalize on the LAX-ASIA markets b/c the competition is just too great in LA and much of NYC flying has already gone to PHL. With Alaska joining OneWorld and their extensive west coast foothold, AA still has massive access to the west coast without the cost ). There is no doubt we are in for an economic quagmire after this and companies will utilize teleconference and the cheapest airline options to keep costs down. The good days of flying are over and for the foreseeable future, flying will be treated as just necessary infrastructure that gets people from point A to B.

As for UA furloughs, the key now is to keep staff as long as possible. If UA does furlough a lot, it will allow DA and AA to quickly enter markets UA is going to have to leave allowing others to delay and maybe not have to furlough. If they have mostly useless widebodies, then they are left out of a lot of markets.

One thing to keep in mind as well as I heard from someone in United that concerns them - AA wholly owns some regional airlines which allows them to strategically get through this and keep passengers coming into hubs. UA contracts out all regional airlines and arguably some may go belly-up (Compass already has. Mesa may be next). If UA isn't able to bring people in to their hubs to connect them, it severely inhibits their recovery. Add in the fact that AA has a huge cargo operations makes me think AA may not be in as bad shape as UA. DL will be fine long term as well but watch out for labor issues - I can almost guarantee F/As are finally going to demand a union. I do think Delta's ownership in other airlines instead of just alliances creates a lot of problems. You can help one airline recover financially if need be, but every airline is hurting and when you have ownership in so many, you have to pick winners and losers (which then leaves you without specific markets).

At the end of the day, I think AA is going to be the world's largest discount carrier. It will still offer somewhat of a first class product but until airlines completely recover and have money to spare on upgrades and amenities, don't expect them to wow you. They will nickle and dime to the point the FAA allows them to. But I think the next few years will be brutal for airlines and low cost carriers will be the winners. If AA can offer a low cost carrier product while still retaining "first class" and extensive network, it may be able to sway those with a little more $ to go their way. If UA continues to go after mostly corporate money, they will be in worse shape because we've entered the teleconference future.

This is all speculation and I'm no AA cheerleader but just my two cents :)

@FirstClassTraveler74, the reason is simple...Unions. The CBAs simply do not give US carriers like United the ability to enact paycuts unilaterally. So all United can do here is reduce hours to the contractual minimums for Pilots, Flight Attendants, Mechanics, and evening Customer Service and Ramp workers. This is why they’re pushing so hard to get employees to take voluntary early retirement packages. Because even once they are allowed to furlough folks, it’s going to be the lowest seniority (or lowest paid) employees. The ME3 doesn’t have labor agreements like this so they can pay their folks whatever they want or cut pay/furlough as needed.