United’s Turn for Earnings — Deja Vu All Over Again
1 United held its Q1 earnings call on Friday, and like Delta, American and everyone else in the industry it was not good. United fell to a $1.7 billion loss in Q1 2020 from a $292 million profit in the same period of 2019. Revenue dropped nearly 17% from a year earlier to $7.98 billion, slightly below analysts’ estimates.
Currently, United expects to lose around $40 million per day during Q2, but is putting in measures with a hope of dropping that figure to closer to $20 million per day.. This sounds horrible… unless you’re comparing to Delta.
Other United actions taken during the pandemic include:
- CEO and president foregoing 100% of respective base salaries.
- All other officers of the company will take salary reductions, with every officer base salary reduced by 50%.
- Suspended merit salary increases for management and administrative employees and instituted a hiring freeze.
- Offered voluntary unpaid leaves of absence for U.S.-based employees — with more than 20,000 employees now participating.
- Non-employee directors of the company waived 100% of cash compensation for the second and third quarters of 2020.
- Offered employees the option of taking their salary in the equivalent value of stroopwafels. (Not really…but if I worked for United, I’d at least consider it.)
Southwest’s New Promise
2 As part of the dance required to get passengers flying again, airlines have to put together plans on how to keep passengers safe throughout their entire journey.
Following in the footsteps of Delta which saw this as a brand exercise, Southwest on Friday released its Southwest Promise, detailing its plan to keep the flying public safe from check-in to baggage claim.
Measures from Southwest include:
- Limiting the number of seats sold per aircraft to prevent the need for middle seats through June
- Boarding in groups of 10 and only on one side of the boarding poles to encourage social distancing
- Using the poorly-named Sani-Cide EX3, a disinfectant, to wipe down common areas before every flight. (Not to be confused with the Sani-Cide EX2 which became sentient when Skynet went live.)
- Requiring masks or face coverings for passengers for flights after May 11.
The big question now is… will this make people feel comfortable enough to get back on an airplane?
Face Covering & Masks Round-Up
3 Each airline has charted its own path with regards to mask and face covering guidelines. In Cranky’s never-ending quest to serve the reader, we have summed up each major US airline’s policy and conveniently put them together below:
Alaska – Cabin Crew: required, effective May 4, Passengers: required, effective May 11
Allegiant – Not required for cabin crew or passengers
American – Cabin Crew: required now, Passengers: required, effective May 11
Delta – Cabin Crew: Required now if it is not possible to keep six feet from others. Passengers: required, effective May 4
Frontier – Cabin Crew: required now, Passengers: required, effective May 8
JetBlue – Cabin Crew: required now, Passengers: required, effective May 4
Hawaiian – No requirements for cabin crew or passengers
Southwest – Cabin Crew: required now, Passengers: required, effective May 11
Spirit – No requirements for cabin crew or passengers (Spirit is likely waiting until it can sell ads on the masks).
Sun Country – No requirements for cabin crew or passengers
United – Cabin Crew: required now, Passengers: required, effective May 4
It’s likely we will soon see other parts of the travel experience getting into the mix requiring face coverings as well. For example, San Diego International Airport (SAN) made an announcement today that it will require masks for travelers.
United Reduces VDB and Downgrade Compenstation
4 Putting a test to the “If a tree falls in the forest and no one is there to hear it, does it make a sound?” conundrum, United has reduced compensation for voluntary denied boardings (VDB) and downgrades during the weakest travel period in the history of air travel.
Despite the fact that it could be years before planes are so full that a VDB is necessary, United reduced the maximum payout for an involuntary downgrade to $1500 and a voluntary denied boarding to $2500. In the aftermath of the Dr. Dao incident where he was dragged off a United Express plane in 2017, United empowered its gate agents to go up to $10,000 in flight credits in a bump situation to avoid a similar situation, but those days are over.
The Bright Side: Thursday Saw Highest Passengers Levels Since March
5 Further evidence pointing to the idea that the worst has come & gone and demand for air travel has bottomed out arrived today as TSA screened 154,695 passengers on Thursday, the highest total since March 29.
The number of passengers is a 39% increase from the previous Thursday, when TSA screened 111,627 on April 23.
Airline Potpourri
- Copa raised $350 million in capital to keep the airline solvent for the foreseeable future.
- Delta is returning four international routes into service from its Atlanta hub on Friday. Service resumes to Paris/CDG, St. Croix (STX) and St. Thomas (STT) in the US Virgin Islands and to San Salvador (SAL).
- Jetstar Asia extended its suspension of service through May 31.
- Hawaiian extended elite status for its Pualani Elite members through February 2022
- Ryanair plans to cut up to 3,000 jobs and delay plane orders from Boeing as it waits for travel to return to pre-outbreak levels
Andrew’s Moment of Levity
I used some of my free time during quarantine to try orthopedic shoes. I didn’t think they’d help, but I stand corrected.