In an upbeat message to employees, United Airlines CEO Scott Kirby conceded that United has seen a short-term drop in demand, but also expressed his firm conviction that it would not hinder United’s long-term growth plan. Kirby even teased “a couple of cool really big announcements” that will be made later this year. Is Kirby realistic or setting up employees (and investors) for disappointment?
United Airlines CEO Openly Concedes Short-Term Economic Headwinds, Still Sees No Long-Term Negative Impact
In a “Straight from Scott” video message to employees viewed by Live And Let’s Fly, Kirby candidly conceded that “we have seen a slowdown in demand in the last couple months” and noted that while government demand was down in particular, a general slowdown in demand has been observed.
“In the short term, however, you’ve seen all the same headlines that the rest of us have and some of the turbulence and some of the questions that are coming out of Washington. And it is true that we have seen a slowdown in demand in the last couple months. That’s particularly concentrated in the government demand and in government markets, but we have seen a slowdown in demand.”
The airline playbook for such scenarios typically calls for cutbacks and furloughs, but Kirby believes there will be no such action necessary, even if recession hits:
“In the past here at United, when something like that happened, that meant there was a standard playbook that United would go to. Shrinking, furloughs, cutting marketing, cutting investment. What I really want to tell you today is we’re not doing any of that this time around.”
Kirby reasons that United saw this coming (“the reality is we’ve known a day like this was inevitable”) and has set up United since the pandemic to avoid such furloughs (“never again”).
“We were going do everything possible to set the company up to never again have another furlough, and I believe we have now done that.”
While Kirby stops short of actually promising there will be no furloughs, his language is strong with the intended effect of assuaging concerns among employees. Not only will United avoid furloughs, but per Kirby, its growth plan will continue:
“And so now as we enter a period where things may be slowing down, we’re gonna stay focused on the long-term. We’ve got the right long-term plan. We’re going to continue to take delivery of airplanes. Not only are we not going to furlough, we’re going to continue all the hiring and all the classes that are scheduled. We’re going to continue to invest in the product, including Starlink, and more clubs, more in-flight-entertainment on the airplane.
Here Kirby drops a hint at a couple of major announcements to come, adding, “And we’ve got a couple of cool, really big announcements to make later this year that are still fully on track for customers.”
What do you think he means?
Come slowdown or recession, Kirby believes, “We ought to be able to come out of any slowdown that happens–if it does happen–as not just a bigger but a stronger and even more, the leading airline around the globe.”
Is Kirby Too Optimistic?
As the days pass, I become a bigger admirer of Scott Kirby. No, I don’t like what has happened to MileagePlus under his tenure, but I think his words make a lot of sense and I so appreciate his candor in both public and private settings.
Indeed, we all are reading the same headlines and observing the same “turbulence” coming out of Washington, DC. I happen to be far more pessimistic than Messr. Kirby and think that transatlantic demand will be depressed this summer, particularly in a westbound direction. Furthermore, the economic pain brought on by the tariffs (President Trump claims it will be short-term pain, but does not deny it) will also dampen demand.
Let’s also not forget Kirby admitted last week that United is accelerating the retirement of 21 aircraft, though United also recently indicated that a slowdown in business travel has been offset by an uptick in premium leisure travel.
Ultimately, this comes down to a game of cash. Does United have the liquidity or credit line to keep up the investments in anticipation of an eventual recovery? Will investors go along with it? Unlike American Airlines and Delta Air Lines during the pandemic, Kirby and United heavily invested in technology and did not retire entire aircraft fleets, believing (rightly) that demand would boomerang. The plan seems to have worked well.
If United can weather what may turn into a long-term storm, it will be well-positioned to challenge Delta for industry dominance in the USA. But I’m not sure I’d be doing so much hiring or new aircraft acquisition with all the economic and political uncertainty we’ve seen over the last two months.
CONCLUSION
Kirby remains optimistic, even as he concedes United has observed a slowdown in demand. At least at this juncture, United will not pause hiring or investment, an assurance Kirby hopes will “make sure all of you [employees] know you can sleep well at night.” But United has clearly and unequivocally added another data point that it is experiencing a slowdown and that alone is cause for concern.
“Slow down in demand” ?
Precursor of recession , as are many other indicators .
@Matthew … Your reply to @DaveEdwards referring to Trump as : “a stupid dotard and his court of jesters” is acceptable in light of free speech , and disagreement over economic policy .
However , it is uninformed thinking considering the economic choices at the last election : (a) the Biden-Soros destruction of the economic free market in the U.S. , or (b) attempts by Trump to right the U.S. ship , and prevent it from capsizing .
You people just refuse to grow up. You are really still grasping onto the George Soros lie? Really? What a sad, pathetic life you clearly lead.
Yeah,
That $9 trillion of our stolen money shore did boost our economy over the past 4yrs.
Kirby seems very certain the government will keep rescuing airlines every time selfish management drives business into the ground.
And I have to think that this time around, it may not happen….
You honestly seem to love taking veiled shits at Trump daily in your articles. If the American consumer pays the tariffs as the far left claims, it should help the countries he’s implementing them on. And their citizens should be happy to visit American instead of living in their European sh#tholes being overrun with terrorists.
And if you don’t think what Trump is trying to do with the debt, deficit and overall government spending isn’t good long term for your kids, you are wrong. But it’s current selfishness of you and everyone else complaining that he’s addressing issues both parties ignored for far too long.
If your “business” suffers and you can’t fly around the world weekly for fun and can only go monthly, you’ll live. Bottom line is the multi millionaires like you, me and most of the readers here are concerned for personal SELFISH reasons. We don’t give an F about Ukraine, the Middle East or other 3rd world sh#those until it affects us financially or a risk of a bigger war. It’s why kids in Africa have been starving, dying or being exploited for decade after decade, it doesn’t hit our wallets.
All this fake outrage comes down to our greed.
Dave, maybe take a Macroeconomics 101 class? Tariffs are a protective tool used to raise domestic prices with the stated goal of protecting domestic industry. Tariffs do not help consumers on either side – tariffs add federal government revenue and protect favored industries (we call that crony capitalism). The US is (was?) transitioning to a service-based economy in which our comparative advantage was, to put it simply, our R&D…and our intelligence. The sort of technological development in which we have a massive trade surplus with the world and that is not easily quantified.
The idea that we should go back a century and produce everything ourselves here is laughably stupid from a stupid dotard and his court of jesters who won’t tell the emperor he is wearing no clothes. Wake up.
As for the debt and deficit, it’s like a patient on drugs (the US on deficit spending). A huge problem, but a cold turkey approach does not work. We have to wean ourselves off and I support such efforts to balance the budget including by letting the tax cuts expire and also auditing every federal agency with a fine-tooth comb. And I know you’re incredibly racist (sorry dude, it’s only based on your comments here) and hate those with darker pigmentation than yourself, but letting thousands (maybe millions over time) of people die in the developing world by cutting off aid for life-saving programs like malaria medication is so short-sighted and stupid; it undermines American influence as a force for good around the globe. It allows China to rise faster to fill the void.
And I do “give a F” (as you put it) about Israel and Ukraine… because I recognize the lessons of history. Did you totally miss that in my Imperial War Museum post? Are we not ever able to learn from history? Are we always doomed to repeat it?
No offense, because I like your writing in general, but this may be the best thing you’ve ever written on this site. Thanks for being willing to say it.
Mahalo Matt. Brilliant response.
I agree and greatly admire your polite response to such a rude person.
At one point, as a newcomer here, I was very critical of your free speech policy. I have to admit, I understand now.
Eventually, racist idiots collapse under the weight of their foolish words.
By the way, things are getting worse every day:
https://www.lemonde.fr/en/international/article/2025/03/20/french-researcher-denied-entry-to-us-for-expressing-personal-opinion-on-trump-policies_6739346_4.html
I think that’s an improvement.
Get it right Matt, I’m not anti darks like blacks, I’m anti beaners like Ricardo and terrorists that fly planes into buildings.
Being fearful of dangerous people is a great way to live your life by. But don’t fear, I dislike many whites too, mainly liberals and of course Hanes Grazers.
Wake up, the American public overall agrees with Trumps ideas and is turning on the left in numbers not seen in decades. Burning Tesla’s isn’t helping their case. Americans overall want the beaners sent back south by a large majority.
We are winning and so are your kids. Stop being so greedy. And oh yea, save the lambs, no one needs to eat them.
Wow, @David Edwards, you sound like a miserable man. You’re wrong on so many levels, and I say this as a Republican and Trump voter. You are not ok. And I agree with Matthew, you need to take an economics class because your comments make it seem like you have no idea what’s going on around you.
So you are selective racist? I love how proud you are of your stupidity….no wonder no one likes you.
@Matthew ..,. Although @DaveEdwards does not use elegant words , he does Get that the stakes in the last election was to save the U.S. from the Biden-Soros path to self-destruction .
Any failing educational system which graduated Camel-a obviously needs to abolish the Dept. of Education , and start over .
Well said Matt.
You are the optimist using facts and knowledge to flip a Trump supporter….good luck with that. Violence and chaos is what motivates them.
And the world wondered why all the AI lords have been kissing Trump’s ass over the past few months. Does anyone really believe Trump wants to bring back manufacturing to the USA to employ Dave Edwards? The majority of those jobs will be filled by bots.
VERY well said Matthew!! The other posters can’t seem to grasp the concept at all and will say and do anything to try and keep their “King” relevant no matter what is happening right now. They based their vote on the price of eggs and they are going to get a swift, brutal kick in the nuts very soon!!
Excellent points. Japan’s isolation brought stagflation, lack of techno advancement and a dearth of international trade, They’ve only started to reemerge in recent years. I know you know this, but perhaps some of your readers like Dave are unaware. The Felon in Chief’s economic plans are a recipe for disaster.
Oh Dave, I can never figure out if you really believe the lies you repeat ,you are a Russian bot, or you are just stupid. Generally, I believe you are the latter.
You really believe Trump is worried about the US debt? The guy who inherited hundreds of millions of dollars and who’s declared bankruptcy 5 times is worried about the US deficit? The guy that encouraged Americans to drink bleach to fight COVID-19 is who you want to listen to? The man who borrowed close to $9 trillion during their first 4 years in office. Do you really think Trump or Musk have any idea on how government works? Really?
The problem America has today is not a political one, but a intellectual one. There are just too many stupid people in America and who do not have the bandwidth to understand how ignorant they are. This is how democracies fall, and unfortunately due to people like yourself I do not have much hope for democracy in America.
And the most pathetic part is the fall of democracy in America will hit people like yourself the hardest. And you will still blame someone else.
You’ve said nothing wrong here.
As an economist I can assure your that it is a FACT is that consumers pay for tariff not companies
Why do you assume everyone wants to visit America? There are tons of countries all over the world with less gun violence, less police harassment and less stupid government.
Just admit no one wants to visit America in its current state. Its not a welcoming country
I take everything with a grain of salt. While I think Kirby has good conviction about not doing furloughs, I think the statement about continuing to hire is rather foolish. Company leaders know that attrition and retirement will continue to occur, but lowering hiring is an easy way to cap expenses.
As United is going to be retiring 21 planes, this is a prime opportunity for them to slow, but not halt the pause on employee hiring which shall help their P&L.
Lets not forget that United is in an up gauging mode, with their 321 deliveries, which will be excellent regardless of the demand environment because they only require 6 employees.
Given UAL has about 100,000 employees, which is roughly 100 employees per airplane. Retiring 21 planes early translate to a surplus of two thousand employees.
I do wish Scott Kirby and his management team can avoid laying off UA employees amid recession, as some external factors are beyond their control.
I think Kirby is referring to lots of mistakes AA made over the past 20 years. From 2001 to something like 2012, AA didn’t hire any flight attendants. The airline just shrunk till it filed for bankruptcy. Then, it started hiring again. Kirby is indicating that shrinking the business won’t be a solution. He seems to be more of the mindset that United needs to keep innovating or die. You could say that Delta approached it’s bankruptcy with that mindset. Delta radically changed in bankruptcy and even had a marketing campaign called Change. AA went into bankruptcy and came out of it still the same with labor desperate for US Airways to rescue them. So, today, AA is a bit of basket case with a lack of identity or plan.
It’s a bold statement, but unlike some others, it’s grounded in acknowledgement of a downside scenario.
Will be curious to watch it play out and wish him well. Please reverse the nickel and diming of the Million Miler program if you’re playing the long game with long game spenders.
And ‘keep hiring’ doesn’t necessarily mean growing the crew headcount, if their modeling of attrition anticipates a lift in retirements.
I’m 100% in agreement with your comment.
Disingenuous too lead employees on by giving false hopes of furloughs…Kirby has to answer to ‘sharehokesters’ & the ‘bored’ of directors. Employees like aircraft can be ‘scrapped’ at any time if they don’t produce $$$. I’m not reassured that Kirby is so certain of the future where there won’t be another pandemic, castastrophic terrorist attack or world war ….
Kirby is making a smart bet. A few months from now recession fears , unemployment , inflation, etc can be behind us. I hope I’m right but I could be wrong. One thing for sure when Trump packs up and leaves the White House in 3 and a half years I’m selling it all.
If he leaves. 😉
..And why doesn’t Kirby devote more attention/influence to finalizing a decent contract for his company’s flight attendants ? … Or maybe he’s spending his energy on a ‘retirement’ plan for them instead ?
I guess as the economy worsens, he is hoping the deal will become less and less generous?
I’m not so sure the deal will become less generous in so much as the staff may care less. It would be penny wise and foolish for Kirby to take that bet. After all, it was management that had drug their feet on a contract all while they did stock buy backs. Probably not the best look but what do I know.
Flight attendant negotiations have been under mediation for at least a year. The mediator broke off talks with an indefinite return because he knew what the f/A’s wanted was so divorced from reality there was no basis for negotiations.
The A320/A319’s to be retired are about the oldest in UA’s fleet. They would have been gone a couple of years ago if the MAX’s had been delivered as expected.
These were always planes that could go either way, depending on the economic climate.
They are hitting their D checks and would have been out of service for them for months anyway. UA must feel comfortable that they can pull them, and most are due to be pulled in Q4, because by then the MAX and A321 deliveries will be coming along.
Why did you place someone who destroyed a Fortune 20 company in record time on your Board of Directors???
This is a sore subject! F*** Scott Kirby and F*** donald trump! Really!