United Airlines was one of the carriers that didn’t underplay the potential impact of the global health crisis from the beginning. It had been preparing for the worst since the COVID-19 outbreak began catalyzing internationally. Today, at the World Aviation Festival, the airline’s executive chairman, Oscar Munoz, spoke about how his company is managing the crisis and what the future holds for the aviation industry.
What a difference a year can make
The pandemic has forced airlines across the US to seek support during the unprecedented passenger downturn. The former United CEO is vocal in defending airlines when it comes to assistance. He says that many carriers take deep offense to the term “bail” and they are looking to change the outlook for the industry during these challenging times.
Munoz talked of the “three Rs” that are helping the industry cope, which are rethink, rebuild, and recover. However, he added that a fourth R is relevant, and this is “reclaim”. He said that it is important to reclaim the narrative as he is immensely proud of the place the industry had reached before COVID-19. When it came to financials, liquidity, and customer-centricity, the market was in a healthy position.
This time last year, Munoz jokingly highlighted that the airline was starting service between New York and Heathrow, hour-on-the-hour service from 6 to 10 pm. This was the kind of demand it had, and nobody was looking for a bailout at all.
The company built itself into a formidable business, and it had even prepared for what it thought was the worst-case scenario, what Munoz calls a 9/11 scenario, which was previously one of the worst crises that the industry ever faced. Altogether, it had plenty of liquidity, and ample strategic and risk assessment possibilities around that point.
However, no business or industry that has been hit by a pandemic like this could reasonably withstand a near 100% drop in demand. Therefore, Munoz feels that the difficulties of the past few months are not at the fault of those involved in the market. So he wants to pay tribute to this industry that had strengthened itself before the virus.
Preparing for the worst
United started the year with great intent and opened up new routes and was reconfiguring aircraft rapidly following a record-breaking 2019. Nonetheless, despite the strong positioning of the company at the beginning of 2020, it was wary of the potential impact of COVID-19.
The carrier saw demand drop in Europe and quickly extrapolated to what could happen if the virus reached the US. Therefore, it immediately began to amend its schedule. Moreover, it was talking about the possible long-term effect of the pandemic from the beginning.
Munoz believes that United helped to raise the alarm before calming fears and, importantly, gather an early consensus as to how to respond to the situation. He also highlights that the operator managed to access liquidity at a critical time.
Moreover, even though there is a lack of passenger activity this year, United is keen to show those who choose to fly that it is safe. From masks to education, electrostatic spraying, and HEPA air filters, the industry is doing everything possible to maintain a clean environment.
Moreover, the airline is overseeing what it calls a frictionless travel experience. Initiatives such as its touchless kiosks, its app that sends up-to-the-minute communications, and the ability to change US flights without fees enable this experience.
Collaboration is key
Politicians are heavily debating the topic of additional federal aid. With thousands of jobs at stake across the industry, a lot is riding on the outcome of the decision. United’s leadership is keen to help the US government understand the obstacles that the industry is facing and why support is needed. Altogether, Munoz believes that working together is critical in the road to recovery.
“This is not an industry that just restarts automatically. We have to have people in place. We have to have people training. And importantly, these are folks that are really focused on the safety of flying. And so we want to emphasize that,” Munoz said during the talk at the World Aviation Festival.
“I spend a lot of time with countries and their ambassadors emphasizing the importance of collaboration across the world so that we can work together, in essence, to open up the international travel piece. And we’re making good progress. And it’s not just about jobs and the support that we’re asking for. It’s about keeping the economy thriving and, importantly, the world that we live in connected.”
A proactive approach
Nonetheless, despite the hardships, United is continuing to position itself to be in the best shape possible after the worst of the crisis is over. Munoz highlights that those that are best prepared will be able to weather the storm better than others. He is positive that the carrier will re-emerge as a better outfit than before.
“Just this month, the airline introduced a new international service. Our global network is one of the best, if not the biggest and [we are flying] non-stop services from mainland US to Africa, India, Hawaii, expanding on some of the things that we’ve already done,” he said in the talk.
“And while these folks are a bit about meeting demand, they’re also about demonstrating our confidence that when a vaccine is widely distributed and demand returns, we will emerge as a better airline. Better for our customers, for our employees, for the people that we work with and across the aviation industry.”
United today shared that it is starting to offer COVID-19 testing for travelers before flying. The pilot program is in place at San Francisco for flights heading to Hawaii. The carrier has been working with Hawaiian officials to have this process as an alternative to a 14-day quarantine.
The operator has also been trying to push this procedure out on the United Kingdom and European Union. Munoz expressed how hard it is for loved ones to see each other amid all the travel restrictions in place. Perhaps, if the pilot is successful, we could see more authorities adopting this approach.
All about action
Initially, there was a lot of confusion and misunderstanding across the industry and the impact of the pandemic. Regardless, the worst-case scenario, bankruptcy, is off the table for United. Munoz concluded the discussion with what the key factors in handling the challenges are.
“If you know your business and you’re confident about your metrics and what they mean and what they portend, you act, and you act quickly, and you don’t look back.” Munoz said.
“You act, you talk about it forthrightly, you put it on the table with anyone that’ll listen, and you push and you push.”
Altogether, Munoz emphasizes the importance of education during this time. He feels that the public often doesn’t completely understand the aviation industry because of ongoing issues in the market, such as air traffic and weather issues. So, when it comes to current factors such as safety and cleanliness, aspects such as transparency, communication, and understanding are crucial elements.
What are your thoughts about how United Airlines is managing during this COVID-19 crisis? How do you see the situation evolving over the next few months? Let us know what you think in the comment section.
