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.
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.
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