United reshuffles management as it prepares for uncertain recovery

By Tracy Rucinski

(Reuters) - United Airlines Holdings Inc (O:UAL) is reshuffling its management team to help the airline prepare for the near-term uncertainty of travel demand, new Chief Executive Scott Kirby (NYSE:KEX) told employees on Wednesday, as restrictions to keep the coronavirus from spreading are lifted.

With stay-at-home orders easing across the United States, airlines have pointed to slight improvements in air travel demand that had virtually disappeared in April. Still, the outlook remains uncertain.

"Demand could be down 30% or it could be down 70%," Kirby said.

Under the changes, Jon Roitman, currently United's senior vice president of airport and network operations, will replace Greg Hart as chief operations officer effective June 1.

Hart will be taking a step back to focus on medium- and long-term issues including innovation on safety, hygiene, and operating efficiency as airlines prepare for drastic changes in the travel industry following the coronavirus outbreak.

Hart will also be tasked with developing a more nimble cost structure, including labor costs.

Chicago-based United came under fire when it tried to cut working hours for thousands of union aircraft and passenger service workers, a plan the union said violated the terms of government payroll aid under the CARES Act, which bans airlines from cutting jobs or pay rates through Sept. 30.

United rolled back the plan after the union filed a lawsuit, but is still cutting hours for 10,000 management and administrative employees not covered by a collective bargaining agreement.

The company has said the move is in compliance with the CARES Act.