CEO of bailed-out United Airlines thanks America for 'vital public assistance' and pledges aircraft to deliver medical supplies throughout the world
United Airlines CEO Oscar Munoz announced Saturday that the company would be dedicating several cargo charter flights to help deliver critical medical supplies. Munoz in an email said the company would use its planes to carry supplies around the US and to key international business locations at least 40 times a week. In his statement, he also expressed his "heartfelt appreciation" for the $60 billion bailout United Airlines and the entire airline industry received. Visit Business Insider's homepage for more stories.
In an email thanking the US government for bailing out the US airline industry, United Airlines CEO Oscar Munoz pledged some of its planes to deliver critical medical supplies and goods during the coronavirus pandemic. "Right now, aircraft flying the United livery and insignia, flown by our aviation professionals, have been repurposed to deliver vital medical supplies and goods to some of the places that need it most," Munoz announced in an email. The major US airline CEO also announced that several of United's idle widebody aircraft would be used as charter cargo flights to transfer goods critical to battling the coronavirus around the US and to "key international business locations," primarily in Europe. "With coronavirus (COVID-19) creating an increased need to keep the global supply chain moving, we are utilizing our network capabilities and personnel to get vital shipments, such as medical supplies, to areas that need them most," a spokesperson from United confirmed to Business Insider. United began dedicating some of its passenger planes to transport goods for commercial customers on March 19 — on the first two freight-only-flights from Houston, Texas, approximately 40% of the tonnage on both were medical supplies. The flights are currently operating out of US international airports including, Newark International Airport, Chicago O'Hare International Airport, Houston George Bush Intercontinental Airport, and San Francisco International Airport. In addition to these US locations, the charter flights are also flying from key European cities including Amsterdam, Frankfurt, and London.
Munoz pledged that the airline would make at least 40 of these cargo trips per week, but a spokesperson for United told Business Insider that the company is expanding their cargo flights every week. The news comes just after President Donald Trump signed a $2 trillion economic relief package on Friday, which included a nearly $60 billion bailout based on requests made by the nation's airlines, including United. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, granted $58 billion to be split amongst the companies on the condition that the airlines could not lay off or furlough employees through September. In a statement the following day, Munoz wrote a heartfelt email thanking US officials for passing a "comprehensive relief act to ensure our airline" which he claimed would go to save the jobs of 100,000 United employees. "I want to relay to you, in as deeply personal a way I can, the heartfelt appreciation of my 100,000 United team members and their families for this vital public assistance to keep America and United flying for you," Munoz wrote in an email sent to Business Insider. "And it allows us time to make decisions about the future of our airline to ensure that we can offer you the service you deserve and have come to expect as our customers," Munoz added. As the coronavirus swept the globe, countries have implemented strict lockdown measures to curb the spread of the virus thrusting the airline industry into free fall— at least 55 global airlines have completely stopped flying scheduled flights due to closed borders, travel restrictions, airspace closures, and plummeting travel demands. On Friday, Trump signed a $2 trillion stimulus package that allotted $25 billion in loans and loan guarantees for passenger airlines, and an additional $4 billion for cargo air carriers. A separate $17 billion in loans is specified for companies "critical to maintaining national security." Boeing is reported to be the intended recipient for a large portion of the amount. The loans are conditional on job protection — airlines accepting aid will not be allowed to lay off or furlough workers until September 30, at which point the crisis could be over or winding down for air carriers. During a time when people are required to quarantine and social distance, Munoz said the company looked forward to resuming its role as a "connector" flying passengers to "the moments that matter most in your life" after the coronavirus crisis passes. "Our nation and communities will recover and United will return to service you, our customers," Munoz wrote. "When that happens, we want you to fly United with even greater pride because of the actions we took on behalf of our customers, our employees and everyone we serve." David Slotnick and Julie Bort contributed to this story. Join the conversation about this story » NOW WATCH: Here's why in-flight WiFi is so slow and expensive
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United says it will ban passengers who do not abide by its requirement to wear masks on board flights (UAL)
United Airlines said it will ban passengers who refuse to wear a mask on board flights...United Airlines said it will ban passengers who refuse to wear a mask on board flights during the coronavirus pandemic. The length of the ban will be determined after a security incident review. Passengers will be warned multiple times and offered a mask before they are referred for the action. US airlines have come under criticism for failing to enforce mask requirements, but an industry trade group said Monday that more substantive enforcement is coming. Visit Business Insider's homepage for more stories. United Airlines said Monday that passengers who refuse to wear masks on board flights could be banned from traveling with the airline in the future. The new policy takes effect on Thursday, June 18. Most US airlines have added requirements in recent months for passengers to wear masks on board flights and, in some cases, in airport facilities or while boarding or disembarking the aircraft. However, airlines have come under criticism for failing to enforce requirements or to provide clear guidelines surrounding the handling of non-compliant passengers. The lax enforcement has led to complaints from some other passengers, especially on flights that were relatively full. Earlier on Monday, US airline industry lobbying organization Airlines for America (A4A) said that its member airlines would strengthen their respective mask policies and practices, which would include pre-flight communications, on-board announcements, and consequences for noncompliance. The organization said that individual member airlines would detail their own "appropriate consequences for passengers who are found to be in noncompliance of the airline's face covering policy up to and including suspension of flying privileges on that airline." A4A members that will strengthen their mask policies include Alaska Airlines, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, and United Airlines. United was the first to announce the new policy. United said that passengers who violate the policy will be banned from the airline for "duration of time to be determined pending a comprehensive incident review." "Every reputable health institution says wearing a mask is one of the most effective things people can do to protect others from contracting COVID-19, especially in places like an aircraft where social distancing is a challenge," said Toby Enqvist, United's chief customer officer, said in a press release. "We have been requiring our customers to wear masks onboard United aircraft since May 4 and we have been pleased that the overwhelming majority of passengers readily comply with our policy." "Today's announcement is an unmistakable signal that we're prepared to take serious steps, if necessary, to protect our customers and crew," Enqvist added. Flight attendants will inform passengers of the policy, offer to provide a mask, and warn them of the potential consequences before further action is taken, the airline said. A final decision about the passenger's status with the airline will be made at a later point, and not on board. "Wearing a mask is a critical part of helping make air travel safer," Dr. James Merlino, chief clinical transformation officer at the Cleveland Clinic, said in the press release. The Cleveland Clinic is advising United on sanitary and risk-reduction procedures during the pandemic. "The more people in a given space wearing masks, the fewer viral particles are making it into the space around them, decreasing exposure and risk," Dr. Merlino added.SEE ALSO: The airline industry is starting to recover from the coronavirus pandemic, but a second wave could be a catastrophe Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
Airlines have been hit hard by the coronavirus pandemic, in many cases grounding their entire fleets,...Airlines have been hit hard by the coronavirus pandemic, in many cases grounding their entire fleets, furloughing thousands of staff, and issuing dire warnings about their future. Some budget airlines in Europe have already collapsed. Even after the pandemic ends, changes in the market could drive up the famously low ticket prices that opened up the continent, or force airlines to change the way they fly. But airlines' best call may ultimately be to tempt back travellers through cheap flights — if they can afford it. Visit Business Insider's homepage for more stories. As governments around the world close their borders and advise against travel, demand for air travel has plummeted, causing airlines to ground their entire fleets. Airlines have left planes sitting idle on runways, and furloughed hundreds of thousands of staff. The head of the International Air Transport Association, an organization representing the world's airlines, said "the air transport industry is in its deepest crisis ever." The pandemic has left virtually all of the world's airlines at risk of bankruptcy. Some have already collapsed. One analyst said that, even in the best-case scenario, pre-outbreak levels of demand will not return until at least mid-2021. And when that demand does return, the industry will not be the same as before. There's uncertainty about which airlines will survive, how many people will want to fly after a pandemic, and the what kind of new precautions airlines may take in future. John Strickland, an independent air transport consultant, told Business Insider that one thing is for sure: "Aviation is going to be smaller." And among the things at risk are Europe's famously cheap flights, which regularly let people fly for the equivalent of just a few dollars, and for some underpin their entire way of life. Liberal aviation restrictions, plus an abundance of airlines competing with each other — far more than in the US — resulted in what are often very low prices. With Ryanair, outside of peak times, flights across Europe rarely cost more than €100 ($109), and its sales sees flights for as little as €9.99, €5, or even €0.01, for flights. "Those markets have grown enormously because many people who couldn't afford to travel before have done so whether it is for visiting friends and family going on holiday," Strickland said. The result is not only uber-cheap flights, but the knock-on effects of tourism booms and people moving to work all over the continent. Among the largest are Irish airline Ryanair and UK airline EasyJet, the biggest and fourth-biggest airlines in the world respectively by their number of routes. Both are hurting from the crisis — and any collapses, or changes to their models, would have huge impacts on the way people fly. The biggest low-cost airlines are under immense pressure The Irish Times reported that Ryanair is now operating fewer than 20 flights a day, less than 1% of their usual daily average of 2,500. And EasyJet is not offering any flights. It has grounded its entire fleet of planes and is furloughed its 4,000 cabin crew based in the UK. The airline has deferred 24 of the planes it had ordered from Airbus, after Sir Stelios Haji-Ioannou, the airline's founder, said the airline would run out of money in August unless it scrapped the entire £4.5 billion order for 107 planes, which said were now "useless." The company has since secured a £600 million loan from the UK Treasury and said it will bring its cash reserves to £2.3 billion this week. Haji-Ioannou, who is now a major shareholder, had threatened to "personally sue those scoundrels" if the company took the loan and still went ahead with the order for 107 planes. Ryanair is among Europe's best-placed airlines to ride out the crisis Analysts have noted that Ryanair has €4 billion of cash on hand — enough for 18 months. This makes it one of Europe's best-placed airlines. Strickland said that Ryanair has a "phenomenal amount of money" and is "not loaded down with debt" from its plane purchases. He credits this to the airline's "aggressive approach" to being low-cost — an approach that made it famous both for one-cent flights sales and unpopular money-saving policies like passengers only being able to bring a tiny bag on board without paying more. Ryanair at one stage even proposed charging passengers to use the bathroom, and has explored "standing" seats to it could fit more passengers on planes. "Some people look at Ryanair's margins of profitability and would think it's excessive," Strickland said. "I've seen so many failures and so much weakness that I defend an airline like Ryanair and its need to have that money in the bank." Dr. David Warnock-Smith, an air transport adviser and head of aviation at the UK's Buckinghamshire New University, told Business Insider that "only very few, maybe a handful of carriers worldwide, have substantial cash reserves." Strickland credited Ryanair's reserves to the way that it, like many low-cost airlines "will really negotiate toughly on every cost, particularly airport charges" to bring costs to a minimum. And the airline has thrived after previous industry shocks, like the September 11 attacks in New York, when it used the opportunity to buy more planes from Boeing. But savings could potentially make it harder to get the financial relief that governments are exploring to keep airlines afloat. Warnock-Smith said that asking for government support when you have substantial cash reserves is "tricky." "The longer this outbreak goes on, the worse it will be for those that have actually made substantial cash reserves. Because there's absolutely no chance they will get any support until they are on death's door." The collapse of some airlines could make tickets more expensive The crisis could result in more expensive flights, or changes to the way flights are run. Andrew Charlton, an independent aviation analyst, told Business Insider that reduced economic activity and flight demand could cause the collapse of many airlines — potentially creating a landscape in Europe that more closely resembles the US. In the US, he said, the top four airlines control more than 80% of the market as of 2018. But in Europe, the top four control 40%. "I think what's going to happen is that we get a significantly smaller number of airlines, and those airlines will start to behave a little bit more like the airlines in the United States behave. In other words: with fewer airlines, fares go up." This would mean fewer airlines to meet demand, so those that remain could decide to, or might have to, increase fares. But higher fares could put people off flying when airlines need travellers the most. Warnock-Smith said Europe's prices got so cheap because there are so many airlines: "Supply is higher than demand, which has led to a surplus of seats, and that's put downward pressure on fares." He said if airlines collapse, and then demand for flights picks up again, "we might see higher fares because, because demand will outweigh the supply." But he said that would only be likely for a "temporary period." Some European budget airlines have already collapsed. UK airline Flybe cited the virus when it collapsed in March, and Lufthansa shut its budget airline Germanwings in April as it restructured, warning that it will take "years until the worldwide demand for air travel returns to pre-crisis levels." And flying could change with airlines that survive Low-cost airlines could end up making changes to some of their unpopular cost-saving policies, or double down on them. In the case of Ryanair, Strickland said: "I think the one thing that you can safely guarantee is that they will do whatever they think makes them profitable." He said that some carriers could return to the market with a smaller offering of flights, even if the reduced offering is temporary. Some airlines might expand to capitalize on weakness in their rivals or new openings in the market. Strickland said entire routes could be left up for grabs, pushing airlines into new spaces. It could even push some airlines to branch into areas they have never entered, like Ryanair into long-haul flights. "[Ryanair CEO] Michael O'Leary has time and time again denied that he ever wants to do that. But gosh, if at the moment, given how everything else has changed, there's no reason why that might not change as well. We just don't know." The most vulnerable airlines could be driven to ultra-low fares to entice travellers, even if that is not sustainable, Strickland said. "Some airlines, which frankly have bad business models or bad locations or whatever ... are going to do stupid things." He said a "fundamental flaw" in aviation economics could occur, whereby "a good, successful airline can put a ticket out at a particular price in the market and then an irresponsible, financially struggling, bankrupt airline can put out a ridiculous fare." And extended social distancing requirements may mean people have to stay further apart on planes. "If there are going to be those kind of restrictions, what would that mean for flights?" Strickland asked. "Would that mean that airlines are going to have to fly, let's say half full, or always have a middle seat free as you would typically have in a business class?" "That would arguably force you to put prices up — but if you put prices up then you get less people going anyway." One Wall Street analyst has already recommended that the middle seats of planes be removed. But Warnock-Smith said spacing out passengers would be a huge financial risk for airlines. Airlines also have to hope that people will want to fly Airlines will need people to actually want to fly — and for countries to want visitors when the outbreak ends. Strickland said that Ryanair and EasyJet can typically tempt people with cheap prices during any uncertainty: "They've got so many wonderful places. They know people are going to take advantage." "But at the moment there's much wider uncertainties: We don't know how much demand there will be." He estimated that demand will be "substantially" lower. Reasons may include people having less money being of a wider economic collapse, and lingering fears of flying from the pandemic. Warnock-Smith said that people are likely to take fewer non-compulsory trips. "I think initially there'll be sort of a lack of confidence and then over time that will pick up again, just like after September the 11th." Many popular low-cost destinations, like Spain, France, and Italy, are among the worst-hit. "We don't know what state these markets will be in," Strickland said, either in wanting visitors or visitors wanting to go there. They key could be in keeping the cheap flights that won over customers in the first place. Strickland said that airlines' response to other crises, like the September 11 attacks or the 2008 financial crisis, was to set prices that incentivize flyers. "I keep using Ryanair as an example, but it's certainly the best one," he said. "They've offered prices at almost nothing," he said, "to kickstart the market and get people back to flying." But the question remains as to whether Ryanair, or any other airline, will be in a position to do it.Join the conversation about this story » NOW WATCH: Why Tesla's Model 3 received top crash-test safety ratings