United prepares to cut workforce to reduce cash burn
United has drawn up plans to slash its workforce if there is not a swift rebound in air travel, as its incoming CE wrestles with how to cut the carrier’s cash burn. Scott Kirby, United’s current president, who will take the top job on May 20, said the airline could lower its cash burn to $20m a day in Q4 under a plan that assumes demand for air travel remains at zero into next year. “What I’m about to describe I hope and pray we won’t have to do, but we already have a plan on the shelf . . . to get our cash burn, at a worst case, down to $20m per day,” Kirby told investors on Friday. The airline is currently burning about $50m in cash per day as the aviation industry struggles to manage an unprecedented drop in demand caused by coronavirus. United said that figure would fall to beneath $45m in Q2, then south of $40m in Q3. “The difference between that third-quarter number and that fourth-quarter number is really about employees,” Kirby said. Like all the major US carriers, United received a portion of a $50bn bailout from US taxpayers. The terms of the deal prevent the airline from laying off or furloughing workers until after September 30. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-05-04/star/united-prepares-to-cut-workforce-to-reduce-cash-burn
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United prepares to cut workforce to reduce cash burn
United has drawn up plans to slash its workforce if there is not a swift rebound in air travel, as its incoming CE wrestles with how to cut the carrier’s cash burn. Scott Kirby, United’s current president, who will take the top job on May 20, said the airline could lower its cash burn to $20m a day in Q4 under a plan that assumes demand for air travel remains at zero into next year. “What I’m about to describe I hope and pray we won’t have to do, but we already have a plan on the shelf . . . to get our cash burn, at a worst case, down to $20m per day,” Kirby told investors on Friday. The airline is currently burning about $50m in cash per day as the aviation industry struggles to manage an unprecedented drop in demand caused by coronavirus. United said that figure would fall to beneath $45m in Q2, then south of $40m in Q3. “The difference between that third-quarter number and that fourth-quarter number is really about employees,” Kirby said. Like all the major US carriers, United received a portion of a $50bn bailout from US taxpayers. The terms of the deal prevent the airline from laying off or furloughing workers until after September 30. <br/>
