By Miguel Mike Medina
Photo Credit: CNN
United Airlines will cut about 5 percent of its planned capacity this year.
The company’s CEO, Scott Kirby, announced the decision in a memo on Friday. His mission for the airline is to prepare for oil to increase as high as $175 a barrel.
Despite the capacity cuts, United Airlines remains intact in terms of growth. The company still produces in sales and marketing. United Airlines’ annual fuel bill is expected to exceed $11 billion. The company spent the same amount on fuel last year. One of the great things about United Airlines is that its profit margins and balance sheet are in good standing. It could’ve been much worse if their balance sheet had not been in good shape.
The airline achieved success over the last 10 weeks in terms of booked revenue. The CEO and his company are playing it safe due to the war’s impact. The war has been going on for about four weeks now. United Airlines is the first major U.S. airline to cut capacity.
Before becoming the company’s CEO, Kirby served as its president from 2016 to 2020. Under his leadership, he has elevated the airline across many departments, including operations, marketing, sales, alliances, network planning, and revenue management. Kirby wants to make sure he doesn’t give the impression that the airline is panicking. That’s not what he has in mind.
His goal is to continue taking this company to long-term growth and success. He’s doing his best to ease the pressure and make sure that the cuts to travel don’t harm anyone. Kirbyy is confident that the airline will do right by its customers and everyone else who’s counting on it.
Kirby is a member of the International Air Transport Association (IATA) Board of Governors.
Miguel Mike Medina is the publisher of The MMM Journal. He can be reached at medinamiguelmike@gmail.com and themmmjournal@gmail.com
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