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United Plans Capacity Cut as COVID-19 Cases Spike Across U.S.

United Plans Capacity Cut as COVID-19 Cases Spike Across U.S.
Joe Cortez

With a third wave of COVID-19 cases sweeping across America, United Airlines says they will be forced to reduce their capacity at the end of the year. Under their new plan, the carrier is expected to cut their available seats by at least 55 percent compared to 2019, while revenue is expected to drop by 67 percent in the fourth quarter of 2020.

United Airlines is now walking back a plan to increase capacity during the fourth quarter of 2020, as the rising number of COVID-19 cases is forcing Americans to rethink their holiday plans. In a 8-K filing with the U.S. Securities and Exchange Commission, the carrier now says capacity will drop by at least 55 percent.

United Faces “uptick in cancellations as a result of the recent spike in COVID-19 cases”

Earlier in November 2020, the Chicago-based airline planned to add 1,400 flights during Thanksgiving week, while flying roughly half of their 2019 holiday season schedule. But with a sharp increase of reported COVID-19 cases, United now says their schedule will face further cuts.

“There has been a deceleration in system bookings and an uptick in cancellations as a result of the recent spike in COVID-19 cases,” United writes in their filing. “The Company does not currently expect the recovery from COVID-19 to follow a linear path and, as such, the Company’s actual flown capacity may differ materially from its currently scheduled capacity.”

Instead of flying around 52 percent of their schedule compared to the last two months of 2019, the airline now says their capacity will decrease “at least 55 percent year-over-year.” In addition, the expected cash burn for the fourth quarter of 2020 is expected to increase to “approximately $15 million to $20 million, plus $10 million of average debt principal payments and severance payments per day.”

According to Johns Hopkins University & Medicine, the United States has reported over 11.7 million confirmed cases of COVID-19, resulting in over 250,000 deaths. The Associated Press reports the U.S. Centers for Disease Control is now asking Americans to stay home for the holidays out of an abundance of caution.

Airlines Left Reeling by Spike in COVID-19 Cases

With the COVID-19 pandemic now expected to cut deeper into year-end travel revenues, airlines are scrambling for additional support and resources from the federal government to survive. Reuters reports seven airlines have banded together with trade group Airlines for America in a letter to Congressional leaders, asking for additional payroll support funds.

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1 Comment

  1. ontheway

    November 24, 2020 at 11:23 am

    I would love to help all the business having trouble, but where is all the money going to come from? Are we all going to get taxed at much higher rates? Who is going to pay for it all. We cannot just print money. Very concerned.

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