Analyzing United’s Schedule Cuts

United

In April of this year, United and United Express were planning to operate 151,861 flights on 1,761 directional routes. (That means both Los Angeles to Newark and Newark to Los Angeles are included separately.) Thanks to this coronavirus, about 10,000 of those will no longer operate, a roughly 7 percent cut systemwide. I’ve seen many articles looking at the topline number of available seat miles (ASMs) being cut, but what is the real impact in human terms?

I used Diio by Cirium schedule data to compare April 2020 schedules as loaded last week compared to after this weekend’s big schedule change was loaded. My focus is on the number of flights, as opposed to ASMs.

In this week-over-week change, a mere eight routes saw an increase, but that was for a total of 28 flights the entire month. That barely counts. On the flip side, 408 routes lost 10,546 flights. That’s more than 175 flights every day that will just disappear.

If you heard that United was cutting capacity 20 percent internationally and 10 percent domestically, that may be true but it was probably judging by ASMs and it may have included previous China cuts. I haven’t tried to reconcile the numbers.

So, how does this break out by region? Glad you asked.

The steepest drop was in Micronesia, and that isn’t entirely surprising. After all, that is oriented largely toward Asia travel. But also keep in mind that while the percentage drop is steep, the actual numbers are small. Asia, however, is not small. And Asia’s actual percentage of decline is larger if you go back further and include all the China cuts that already took place.

At the other end of the spectrum sits the regions that are least impacted by the virus so far, South America and Oceania. They are also heavy on leisure or visiting family and not as heavy on business. That helps here, because business travel demand has seen the biggest impact in this downturn so far.

US and Canada flights are down a lot, and that may not seem like it should be the case. The virus hasn’t been found much in the US yet. (And I say found knowing that it’s just our government’s ineptitude at testing that is probably keeping the numbers low.) You would think domestic travel would be a nice alternative to those fleeing international travel, but the network effect is strong here.

International travel is down a great deal, and many of those travelers are connecting domestically within the US. That drops domestic demand. Add in paranoia both from travelers but, more importantly, from companies that are slashing travel, and domestic takes a big hit in multiple ways.

Now, let’s go a step deeper and look at which countries have seen the biggest drops.

There is obviously a big red flag here. How is China not on the board? Remember, China service was canceled long ago. So you can mark that down as a 100 percent decrease that happened before this latest round of cuts. The Italy capacity massacre (buh bye Milan, though Rome remains) has now infected Switzerland as well. Then again, United had really built up Zurich this year, so it’s mostly just a reversal. Japan is no surprise, but Honduras and Panama? Panama loses two flighs a day and Honduras one. That just happens to be a high percentage cut.

As I mentioned earlier, in terms of actual numbers, domestic flying is where the biggest cuts are. Here you can see domestic US percentage cuts by hub origin.

This is exactly what you’d expect. The international gateways see the steepest cuts since they have fewer international flights to feed while the mid-continent hubs remain stronger. Houston has both the advantage of being mid-continent and being a gateway to Latin America which hasn’t seen a big impact.

But what does this really look like in practice? Let’s dive into San Francisco to see how that was affected. I’ll look at this differently than in the previous charts. In this chart, you’ll see the daily decrease in San Francisco-originating flights by destination.

Both Ft Lauderdale and Northwest Arkansas saw service canceled completely. Meanwhile, the rest just saw a culling of frequencies throughout the day. I should note that I didn’t look at aircraft changes so the impact on number of seats per market could vary.

United has just taken its network and scaled it down with few exceptions in the bright spots of the world. This is a wide-ranging move that should help the airline’s bottom line right now.

Get Posts via Email When They Go Live or in a Weekly Digest

38 comments on “Analyzing United’s Schedule Cuts

  1. Kirby’s talk at the JP Morgan conference was illuminating (“at” = via call because the meeting was virtual!). He mentions the teams running different scenarios to develop these plans, that’s a big change from those network planners’ typical jobs.

  2. I am glad that United is being aggressive and should help them weather the storm that is partially media fueled panic. Many companies and entities and employees will suffer far more consequences from fear than they will from Covid-19.

    As a physician, I’m a bit twisted by your comment that the US government has been inept, CF. That is the Slightly veiled political swipe you seem obsessed with making.

    Antigen based testing kits don’t just materialize overnight. Especially with a novel bug. On top of that, you want to assure as much specificity and sensitivity for that test. Controls have to be developed.

    To be honest, herd immunity is how to stop the momentum of this very unfortunate outbreak.

    Turn off the TV news and stick to doing your airline biz analysis.

    Let’s hope the airlines rebound quickly.

    1. As a physician, I’m a bit twisted by your comment that the US government has been inept, CF. That is the Slightly veiled political swipe you seem obsessed with making.

      Sorry to break it to you, but Cranky is correct. Trump at first called this whole thing with Covid 19 “a hoax designed by democrats to make him look bad.” So I would think twice before accusing Cranky of showing his biases as yours look quite obvious.

      1. I’ll leave others to debate you if they wish on your reply, but it does not change the fact that you cannot start turning out rapid test kits with a high specificity or sensitivity in a matter of weeks. I don’t care who is running the country.

        The real answers to truly stop the spread, from a medical standpoint, would have been so harsh and so draconian most would not have been able to stomach it.

        Again, herd immunity and/or a vaccine down the road will help.

        1. Then how is South Korea doing it? They’te tested almost 200k people, we’ve tested around 10k.

          There are reports that the UK expects to be testing 10k people a DAY within a week or so.

          We got flat-footed, and Trump’s CDC cuts are a big part of it.

        2. We’ve known about this issue since early January. The fact that preparations weren’t made, is a sign of pure incompetence in the administration. The Trump admin could have introduced emergency legislation allowing the FDA to allow the WHO/German tests or the South Korean tests to be used in the US, but no—they were only concerned about the impact on the stock market. Pure incompetence starting at the top, and the airline/travel industry is the first of many to pay the price.

        3. It’s a simple TaqMan qPCR assay – details have been on the CDC website for a while; other countries had a decent test weeks and weeks ago, current regime chose not to take advantage of it. Brett’s comment is spot on – Trump has met his match in an opponent that does not remotely care what names he calls it, or what nationality he gives it. His response to this is abject failure.

          1. His response had been objectively good and proactive. Your letting your political biases cloud your judgement.

            1. “His response had been objectively good and proactive.”

              This is a parody response, yes? If not, Jeez…

      2. Wrong, Trunp called the leftist media’s criticism of his response a hoax.So I would think twice before commenting. And the original poster is correct, Cranky always wants to take swipes at conservative politicians, especially Trump, and he’d do well to stick to airline analysis.

        1. Please, must we drag divisive politics into everything.
          The virus has no political affiliation.
          Both liberal and conservative governments across the globe are being slammed by the virus regardless. ( ie: Iran and Italy )

          Please stop the divisive quibbling. It serves no purpose.

      3. Incorrect, Trump called the democrats blaming the virus’ existence on him a hoax; which means it is your bias that is showing.

    2. “ Antigen based testing kits don’t just materialize overnight.”

      Other countries seemed to not have problems “materializing” them overnight. Or within a week. For some reason the US opted to cook up its own, and that didn’t go so well. Hopefully there will be a post mortem at some point so we learn from this.

  3. Great analysis and details.
    Although after DJT’s speech last night, I guess we can expect with the exception of DUB, LHR and EDI, all other European flying will cancel starting Friday night from the US since those airplanes would depart Europe on Saturday.

    Starting Saturday, it may lead to a re-directing of US citizens wanting to come home from Europe through London and Dublin. Not the kind of uptick in traffic they want to see, but it may help BA and Virgin, and to a lesser extent the UA, AA and DL flights into and out off LHR. Not sure where it leaves Norwegian, but it is probably the worst position of all.

  4. There’s an even more important reason why Micronesia is the biggest percentage Brett. The nation put in a travel ban barring entry from anyone coming from a country with an active outbreak of COVID-19. They have to stay on Guam or Hawaii for 14 days and not show symptoms first. A lot of scuba divers have had their plans wrecked because of this restriction.

    That pretty much eliminates most travel TO Micronesia in the first place and only leaves inter island travel. So I was expecting drastic cuts from United to the nation as a result.

    BTW, the IATA website website has a comprehensive listing of all the nations’ travel bans for COVID-19 here: https://www.iatatravelcentre.com/international-travel-document-news/1580226297.htm

  5. United has moved the fastest to cut schedules and been the least reluctant to refund passenger money.

    This is all absolutely devastating financially to United.

    They had $7 billion in capex planned for 2020, mostly aircraft – far in excess of the cash they generated in 2019. They were already going to have to go in debt for their aircraft purchases and they have now had to pull down $2 billion in debt just to ensure they don’t end up in bankruptcy.

    United was only a step up from American in terms of financial strength before this started; they are now at the bottom of the industry. That will have enormous implications for them in the years after the virus dies down and travel returns to some level of normal.

    As for the political sniping, the NIH and the CDC are all run by career public health officials who have been employed by multiple administrations and has long been run as one of the least political functions of the government. As much as some might want to make this whole thing political theater, the decisions about testing, management of the whole process, and recommendations about what steps need to be taken have all been made by people who have worked in public health their whole careers and who could find very few places to do what they do if they were fired from their present jobs. You can argue with their recommendations but they have not acted politically and those that try to politicize this whole virus crisis show that they do not understand public health.

    1. Are you sure you meant to say that United has been the least reluctant to refund passengers money? Cranky’s earlier posts from this week sure seem the other way. Perhaps you mean “least willing” or “most reluctant”?

    2. Actually, Mr. Dunn, Delta will be the big loser here if Fitch and Standard & Pope’s lowers their rating even one notch, back into “junk” status. United and American already have “junk” status on their securities, but if Delta gets down-graded even one rating, it will become materially more expensive for Delta to borrow money or raise money in the marketplace.

    1. Yes exactly & if this were Clinton or any other democrat with the same situation, you can be sure right wing media would be screaming from the rooftops with all sorts of NWO conspiracy nonsense. This is a non-political issue, but when the political establishment fails to look out for the citizens & is more worried about Wall street’s reaction, this is the result you get.

    2. CF,
      I don’t disagree that this has been handled poorly.
      But the CDC and NIH have been operated largely on a non-partisan basis for decades.
      To argue that Trump had anything to do with the inability to get test kits to the public or for hospitals to be prepared for large influxes of patients is simply not supported by facts because those things have been in place for years.
      The CDC was unprepared for this for years; the top leaders including Dr. Fauci have served multiple administrations. He has been very candid including in saying that the US has not done this right.
      This crisis of this magnitude just simply happen to fall to Trump. I suppose after having no public health crisis of this magnitude in the US made the CDC complacent but you would really have to PROVE that they could have done a better job in another administration – and that simply can’t be done.

      At this point, the dice has been cast and there will be lots of time for soul-searching.

      Hopefully this thing will calm down quickly.

      @Delta Lover
      In case you have missed it, the entire US economy is teetering on the edge of historic collapse as economic activity of all kinds comes to a halt.
      Let’s see what the ratings agencies do but I don’t think they will be singling out any company for action in the midst of a nationwide economic crisis. The ratings agencies simply don’t make draconian decisions, esp. since there is little to no current data for them to use.
      If Delta is potentially subject to a downgrade, so are huge sections of the economy.
      And the administration is seeing they will likely offer loan guarantees which is why AAL, American’s stock, slowed its plunge after it leading the industry down for weeks.

      and, yes, David M, United has been the least willing to offer generous refunds. Delta may now be wishing it wasn’t so generous but that genie is out of the bottle and UA matched DL’s policy.

      1. Mr. Dunn….I never said the other carriers would not be down-graded. I simply noted that Delta would pay the highest price for it. You have a tendency to twist others’ posts (including the author of this blog) routinely. Your responses to the AA/AS tie-up in SEA was beyond the pale. You are embarrassing the Employees of Delta Airlines, a company that fed you for many, many years. Please stop.

        1. I am not embarrassing anyone because I don’t represent anyone.

          What is it that you actually love? Who are you speaking for?

          You are simply wrong and don’t understand fundamental business principles.

          Ratings agencies don’t downgrade companies in the midst of a crisis like this absent ; the entire US economy has been downgraded.

          And it is still categorically wrong that the President had anything to do with the bungled handling of the testing protocol? Does he ultimately have the right to fire them? Yes.

          But how about you and others find out how long they have been serving the US and see that the capabilities of the CDC and the US health care system haven’t changed positively or negatively enough to have affected the outcome of this.

          When Dr. Fauci himself says the whole thing has been bungled and not once has he said the administration had anything to do with it but the US has structural health care problems, then it is a political fascination by some on this page that have said the bungling of this is the President’s fault.

          The fact that you can’t find the evidence to support your argument and instead start making personal attacks on people shows that you are no better than the clowns on both sides of the aisle in Washington. and it is both sides. and is embarrassing that some people can’t admit that the entire dysfunctionality of Washington is on both sides of the aisle.

          And the CDC and US public health functions have been largely out of the political fray. Whether you or others can admit it.

          They may be not be competent but they haven’t been political.

          If you disagree provide evidence that it has been political instead of attacking other people.

          1. Mr. Dunn…..I did not say Delta’s (or any other carrier’s credit rating) would be downgraded immediately. Again, all I said was a downgrade in Delta’s credit would put the airline’s securities in “junk” status, joining American and United. As a result, Delta has the most to lose in the event of either an individual downgrade or industry-wide downgrade. Please stop insulting me with remarks like “In case you haven’t noticed….” and “You are simply wrong and don’t understand fundamental business principles.” I can assure you that I do. Mr. Snyder, please accept this as an official request to ban Mr. Dunn from this forum. His rhetoric is damaging these conversations and diluting your Brand.

            1. You are hypothetically picking possibilities out of the universe, so, yes, you are arguing and you don’t demonstrate an understanding of business principles by selectively arguing points which are not supported by the way business actually operates.
              There have been multiple people who have replied on this forum that they don’t want politics dragged into it. There are plenty of people who want to discuss aviation, not the failing national sport of beating people up. This is CF’s blog and he can do what he thinks best but there are multiple people that have disagreed w/ his political statements, even on this article.
              CF is more than capable of deciding what he wants to discuss and who he wants to discuss. He is smart and understands basic principles of free speech. He couldn’t sustain a blog otherwise. If he wants to delete comments or block users, he can certainty do that. He has a lot higher tolerance for healthy discussion than a lot of people – and good for him. Far too many people like you can’t have a healthy debate about issues; free speech is not cutting people off because of disagreements about topics. CF has repeatedly stated that he doesn’t tolerate personal insults and hateful speech – not unlike most other blogs. He embraces a diversity of thought; you would do well to do the same. All you are doing by arguing is putting money in his pocket.

              As for airlines, I think it is far too early to pick winners and losers but if there is a biggest loser so far, it is United. They are the largest carrier across the Pacific. They had nearly the same amount of revenue to Europe as Delta last year -but Delta is larger overall in terms of revenue so the percentage of Atlantic revenue (which also includes Africa) is lower.

              American has said it has no intention of returning to China for six months or more. They are walking away from what I and others have said is the weakest part of their network. Making those kinds of decisions will help them survive.
              United has $7 billion in capex (mostly airplane deliveries) due this year – that is far ahead of their cash flow and they had already said before the virus they would slow capex in coming years.

              And finally, airlines will have to live long-term with the debt they take on this year. American and United do not have the ability to take on significant amounts of unsecured debt right now. Delta does and so do several low cost carriers. American’s costs right now are too high in part because they have to service too much debt (interest payments). United is not far from replacing American as being the most indebted US airline. However, American has a young fleet; United has the oldest fleet of the big 4 and it will get older.

              And you missed that I do agree with CF that this has been handled badly. The difference is that I note that the CDC has NEVER demonstrated the capability to mass produce tests and there is no evidence that any administration – including the current one – has changed that ability. If the CDC believes otherwise, they will say it, not politicians or any blogger.

              It is absolutely true that the airlines are paying the price for a failed system throughout the world of containing disease. The world will get through this thing but there needs to be some serious discussions worldwide to make sure this does not happen again and the airline industry does not pay the price for the world’s inability to prevent and manage major disease outbreaks. Those discussions need to be made regardless of party affiliation anywhere and without pointing fingers. This is a problem humanity has to solve and it crosses all national lines and all parties.

              Oh, and specific to AA, you might note that AA’s gateways of PHL and CLT are NOT permitted to receive flights from continental Europe for the next 30 days which means that AA’s network will be impacted even more than DL and UA. LHR is still one of the largest stations for both DL and UA so they won’t be left out in the cold.
              And, regarding the AA/AS discussion that you want to bring up, how much you want to bet that the SEA-BLR flight doesn’t launch on the date AA said it would? If it makes viable economic sense, it will launch on schedule. I doubted then it makes sense and I still hold to that position. If it actually launches on time, you are free to return to this page and let the world know I am wrong. I am more than capable of admitting I am wrong when I am. Will you be willing to admit that your suggestion about downgrading any airline’s credit in isolation was nothing more than an argumentative distraction if you are proven to be wrong? If Delta’s credit is downgraded, so will be many other airlines including Southwest, Alaska, and JetBlue. And there is still no assurance that American or United can find the cash they need to continue to operate and still have viable balance sheets after the crisis. In isolation, your point is meaningless.

              let’s keep putting money in CF’s bank account by making this forum flourish. Just don’t be surprise if faulty logic is duly noted, regardless of who says it.

    1. AS is constricted to T2 so they have a finite number of gates so they can only add so much. And AS already pared back from what it had previously launched from SFO so I would say that even if now was the time to launch new service (which most certainly it is not for any carrier) AS already tried that and it didn’t work.

    2. Nick – I would say that would be a big mistake. This is not a time for stealing market share. This is a time for trying to survive.

  6. When the rebound happens, and I do believe it will happen sooner rather than later, where will demand for United pick up first internationally as well as domestically? Memories are very short. H1N1 infected over 40 million, hospitalized 300,000 and killed over 19,000 Americans. Hopefully this outbreak will stay well south of those numbers and the public, once reassured, will forget it just like they forgot H1N1 aka swine flu.

  7. Delta just announced a massive 40% capacity cut at least for the near term. Flights to/from continental Europe from permitted gateways will operate until Sunday and then be significantly reduced.

    There is probably no other airline that can get anywhere near the costs related to that capacity cut out of its system. Delta stock is leading the industry up today and has accelerated since their announcement.

  8. It will be interesting to see how well United handles these cuts in the long run, and if they will have to make more flight cuts at any of the hubs because of it.

  9. It will be interesting to see how well United handles these cuts in the long run, and if they will have to make more flight cuts at any of the hubs because of it. And also how well will the hubs handle a reduced flight load in the long run.

Leave a Reply to A_B Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Do NOT follow this link or you will be banned from the site!