United expects to fly fewer people during all of May than it did in a single day last year, the airline's CEO said in a letter warning staff of likely job cuts this fall

• United Airlines' CEO and president said they expected fewer passengers throughout all of this May than the airline carried in a single day in May 2019, due to the coronavirus pandemic.
• The airline had seen a 97% drop in traffic over the first two weeks of April, it said in a letter to employees.
• In the candid letter, the United executives said that despite the CARES Act's payroll support provision would help avoid layoffs before October 1, job reductions would be possible after that.
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United Airlines' CEO and president said on Wednesday that they do not expect travel demand to recover before next year, warning of potential job cuts later this year.

"The challenge that lies ahead for United is bigger than any we have faced in our proud 94-year history," CEO Oscar Munoz and president Scott Kirby - who is expected to take over from Munoz in May - said in an open letter to the airline's employees. "We are committed to being as direct and as transparent as possible with you about the decisions that lay ahead and what impact they will have on our business and on you, the men and women of United Airlines."

United has seen traffic fall 97% over the first two weeks of April compared to the same period last year, the pair said in the letter. They said projections show the airline flying fewer passengers throughout May than they did on any single day in May 2019.

"Travel demand is essentially zero and shows no sign of improving in the near-term," they wrote.

The airline said it expects to receive $5 billion in payroll assistance through the CARES Act, the federal coronavirus bailout package, but Munoz and Kirby said that amount would not cover the airline's total payroll expense, which "only represents about 30% of our total costs."

By accepting the payroll aid, the airline is prohibited from laying off or furloughing workers until September 30.

However, the pair wrote, cuts will likely happen after that date.

"But the challenging economic outlook means we have some tough decisions ahead as we plan for our airline, and our overall workforce, to be smaller than it is today, starting as early as October 1," they wrote. "Throughout this crisis, we have been candid and upfront with you. And today is no different."

In a markedly different tone than what American Airlines CEO Doug Parker offered earlier in the day, in an interview with CNBC, Munoz and Kirby suggested that they were not hopeful of an adequate recovery by fall.

"So, while we have not yet finalized changes to our schedule for July and August, we expect demand to remain suppressed for the remainder of 2020 and likely into next year," they said. Even when social distancing measures are relaxed and businesses begin to reopen, they said that they do not expect life to return to normal quickly.

Munoz and Kirby offered a similar message late last month, shortly after the CARES Act was signed.

In the CNBC interview, Parker said that while he expects the airline's situation to remain bleak through the second quarter, he projected a "very gradual recovery through the third and fourth quarters."

In a communication to employees on Tuesday concerning a portion of the federal aid, Parker and airline president Robert Isom wrote that they expect Americans to be "regularly flying again" by September 30.

In a research note dated April 1, Stifel analyst Joseph DeNardi wrote that even in a best-case scenario, travel demand would only return "to the pre-outbreak trend by mid-2021," noting that current trends suggest that a more "bearish scenario is playing out."

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