Audio By Carbonatix
The US airline industry needs to shrink its labor costs by as much as 50% to survive -- and even then it's possible some carriers don't make it through the crisis, United Airlines Executive Chairman Oscar Munoz told CNN Business."The stark reality of what we're facing is dire," Munoz said in an exclusive interview.
Munoz, an icon in the airline industry who stepped down as United's CEO in May, estimates the collapse of air travel during the pandemic will force airlines to slash their payroll costs by a staggering 30% to 50%. That translates to tens of thousands of lost jobs.
"This industry has gone through hell and back on repeated occasions," said Munoz, who suffered a heart attack and had a heart transplant during his five-year stint as United's CEO.
"This is, by far, orders of magnitude larger than anything we've ever seen."Times are so tough for airlines that they're taking dramatic steps to lure customers.
United (UAL) announced Sunday it will permanently eliminate hated change fees on economy and premium cabin tickets for domestic flights. Delta (DAL) and American followed suit Monday. The shift underscores the enormous leverage travelers now have over hurting airlines.
Thousands of workers take voluntary cuts
Airlines have signaled steep job cuts are on the way.
Last week, American Airlines (AAL) said it will lay off or involuntarily furlough 19,000 workers as of October 1 unless Congress provides more aid.In July, United Airlines warned that 36,000 employees, or nearly half of its frontline workforce, could be furloughed this fall.
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