HomeLive updates: U.S. stocks nosedive, trading paused as emergency Fed action fails to calm investorsTechLive updates: U.S. stocks nosedive, trading paused as emergency Fed action fails to calm investors

Live updates: U.S. stocks nosedive, trading paused as emergency Fed action fails to calm investors

United Airlines disclosed some of the airline industry’s most dire projections yet, as coronavirus and heightened fears of a worldwide recession increasingly shut down enormous swaths of global travel.

On Sunday, the carrier said it flew one million fewer customers in the first two weeks of March compared to the same period last year. The airline is projecting that revenue in March — typically the busiest month of the year — will be $1.5 billion lower last this month in 2019.

“The bad news is that it’s getting worse,” United’s CEO, Oscar Munoz, and president, J. Scott Kirby, wrote in a message to their nearly 100,000 employees. “We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.”

The airline announced a roughly 50 percent cut in capacity for April and May, with the expectations that the cuts will extend into summer travel. Even with those cuts, United expects load factors to drop into the 20 to 30 percent range, at the least.

United said it is talking with union leadership about how to reduce payroll expenses. The airline’s corporate officers will have their salaries cut by 50 percent.

“We took early, aggressive action because we have been determined to do everything possible to avoid painful steps that affect your paycheck,” Munoz and Kirby wrote. “But, based on the severity of the situation, that no longer appears realistic.”

Well before Sunday’s brutal projections, United had cut flight schedules, imposed a hiring freeze, rolled out a voluntary leave program and cut Munoz’s base salary by 100 percent. Other airlines may only have so long before following suit.

On Monday, the owner of British Airways said it will cut capacity by at least 75 percent in April and May. The International Consolidated Airlines Group said it will be grounding flights, cutting hours, suspending employment contracts and halting discretionary spending. The company’s leader, Willie Walsh, is deferring his retirement because of the crisis.

Last week, Delta announced a 40 percent schedule reduction and 100 percent salary cut for its CEO. American Airlines is reducing its international capacity by 75 percent.

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