Financial Performance

United Posts $2.1B Loss, Expects Worse Ahead

With demand collapsing since the second half of March due to the coronavirus, "the worst is still to come" for United.
Matthew HellerApril 20, 2020
United Posts $2.1B Loss, Expects Worse Ahead

United Airlines said Monday it lost $2.1 billion in the first quarter and previewed what could be even worse numbers to come with the collapse in travel demand due to the coronavirus pandemic.

In a regulatory filing, the company preliminarily reported what is its biggest loss since 2008 and that revenue fell 17% in the first quarter to $8 billion. Stripping out special charges, it lost $1 billion.
United’s shares fell 5.2% to $27.56 as it also disclosed that it shed approximately $100 million in revenue per day, on average, in the last two weeks of March after it slashed most of its flights.

“The company has experienced, and continues to experience, a material decline in demand for both international and domestic travel resulting from the spread of coronavirus,” it said in the filing.

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As The Wall Street Journal reports, United’s results are “the first indication of the severity of the impact that travel restrictions, stay-at-home orders, and growing fears of travel had on airlines as they accelerated in the last month of the [first] quarter.”

Yahoo! Finance predicted “the worst is still to come” for United, noting that the first-quarter revenue decline was “significant but not massive.”

In a memo last week, CEO Oscar Munoz and President Scott Kirby told employees that United carried fewer than 200,000 passengers during the first two weeks of April, down 97% from the same period last year, and expects to fly fewer people this May than on a single day in May 2019.

According to Monday’s filing, United “has cut approximately 80% of its capacity for April 2020 and currently expects to cut 90% of its capacity for May 2020, with similar cuts expected for June 2020.” It also plans to “proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand.”

United is seeking to bolster its cash reserves by applying for up to $4.5 billion in government loans on top of about $5 billion in federal payroll grants and loans it also expects to receive.

Justin Sullivan/Getty Images