(Noted News) — United Airlines, the third biggest airline in the US, is preparing to revive itself from the damage it sustained during the coronavirus shut down with massive cost-cutting and restructuring. The company announced that in the third quarter of 2020, it had driven down operating costs by 59% to prepare itself for an eventual recovery from the pandemic. United also has an additional $20 billion of liquidity on hand to help push through some more slowed business.
According to the executives, the airline industry has begun a slow and steady recovery due to some leisurely demand, but with business and international travel practically frozen, it cannot expect to get back to its previous levels until at least 2023.
Scott Kirby, CEO of United Airlines, said he is ready for a new beginning.
“We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history.”
United has cut over 22,000 jobs from its workforce, including voluntary departures, which led to approximately $765 million in pretax costs for Q3. After ramping up its cargo business, United slightly slowed its drop in revenue from 87% in Q2, to 78% in Q2, bringing them to a total of $2.49 billion in revenue.
Other challenges to United’s business model include increased competition in Chicago O’Hare Airport in Chicago and George Bush Intercontinental in Houston, a discount airline; Southwest Airlines plans to add services at both.
Since taking over this year, Kirby’s purpose and message have been to get the company out of the dangerous rut that COVID-19 has put them in.
“[I am doing] everything in my power as CEO to make sure we are in a position to bounce back more quickly than any of our competitors once the virus is defeated and demand begins to recover.
That means we have to continue to plan for the worst. But at the same time, we also have to be prepared for the best. After all, the one thing I am absolutely confident in is that our customers want to fly again and reconnect with people and places around the world.”
In August, United attempted to reach out to customers by scrapping an unpopular $200 ticket change fee on domestic lines.
“Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service. United Airlines won’t be following that same playbook as we come out of this crisis. Instead, we’re taking a completely different approach – and looking at new ways to serve our customers better.”
To assure that customers feel safe, Kirby has also teamed up with Clorox to bring a new era of hygienic standards to the airline.
“We are installing plexiglass in lobby and gate areas, we’re using the same equipment used to clean hospitals to disinfect the interiors of our aircraft, all crew and customers on board are required to wear face mask coverings and we’re taking the temperature of our employees before they start work.
But at United, we’re not stopping there. We’re teaming up with experts from Clorox and the Cleveland Clinic to set a new standard for cleanliness and healthy flying that we are calling United CleanPlus℠.
Clorox is working closely with us to improve how we disinfect common surfaces and provide our customers with amenities that support a healthy and safe environment.”
The crash of March 2020 caused even Warren Buffet to include airline stocks in his big dump of American equities. Currently, United Airlines [UAL] is trading at $33.98 and faces its next big resistance near the $49 level.