United Airlines
Analysts were expecting a far worse quarter for the airline than what occurred, but the situation is far from preferable for the company. In all, United reported a loss of $1.63 billion for the quarter, as opposed to a profit of $1.05 billion in Q2 2019. Revenue plummeted to $1.48 billion from $11.4 billion in 2019, a dizzying 87% difference. Daily cash burn was approximately $40 million a day in Q2.
United has attempted to mitigate the losses through stock and debt sales, as well as several downsizing measures such as May's 30% reduction in management and support staff. Further downsizing and a round of furloughs are looming over the company's employee base, with the company warning 36,000 employees that their jobs may be cut in early July. Some 6,000 employees have, however, opted to take severance packages offered by the company. United was also one of several airlines that received government bailout money.
"I am grateful for the professionalism and dedication of our United team members who persevered through an historic and challenging period to deliver for our customers," CEO Scott Kirby said of the company's mitigation efforts and the efforts of its employees amid the pandemic. "While this unprecedented crisis has been difficult for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors."
United has a shaky future ahead of it amid a surge of new coronavirus infections in the United States, which has wrought havoc with demand for air travel. Kirby, in an interview on CNBC's Squawk Box, stated that revenue could very likely taper off and plateau at 50% of 2019 levels. Kirby also voiced his expectations for airfare to begin decreasing amid reduced demand. Kirby expects the company's problems to continue until a vaccine is developed.
- https://www.cnbc.com/2020/07/21/coronavirus-pushes-united-airlines-ual-to-a-1point6-billion-loss-in-second-quarter.html
- https://www.cnbc.com/2020/07/22/coronavirus-united-ceo-expects-revenue-to-plateau-at-50percent-of-2019-levels-until-theres-a-vaccine.html
- https://www.foxbusiness.com/markets/united-airlines-says-more-than-6000-employees-take-severance-packages-after-1-6b-loss
- https://www.msn.com/en-us/money/news/united-ceo-we-won-t-be-anywhere-close-to-normal-until-there-s-vaccine/ar-BB171e8S?li=BBnbfcN