Key Points: United and other airlines are facing a plunge in air travel demand because of the coronavirus.Airlines are posting their first losses in years because of the pandemic.United executives will update investors on an earnings call at 10 a.m. ET Friday.A United Airlines plane prepares to take off at the Benito Juarez International airport in Mexico City, on March 20, 2020.
United?Airlines?Thursday posted its biggest quarterly loss since 2008 and expects to burn an average of $40 million to $45 million a day in the second quarter as the coronavirus continues to hurt bookings.
The Chicago-based airline and its competitors are facing a 95% decline in U.S. air travel, just as customers are normally gearing up for summer vacation. The second and third quarters are generally the most lucrative for airlines but the virus and shelter-in-place orders are keeping would-be travelers home.
The airline and its competitors have cut costs by parking planes, slashing routes and freezing hiring. They have also encouraged employees to take voluntary unpaid leaves. More than 20,000 United employees took that option, the company said. The airline had about 96,000 employees at the end of last year.?
U.S. airlines earlier this month reach agreements for portions of $25 billion in payroll assistance from the federal government. United said it has has secured about $5 billion in government aid — $3.5 billion in grants and $1.5 billion in a low-interest loan?— that requires it to keep paying its workforce until Sept. 30. It also applied for a federal loan and it expects to borrow as much as $4.5 billion.
United said it swung to a $1.7 billion loss in the three months ended March 31, from a $292 million profit in the same period of 2019. Revenue dropped nearly 17% to $7.98 billion, slightly below analysts' estimates.
The airline earlier this month disclosed a pretax loss of $2.1 billion in the quarter. The company lost $2.57 a share on an adjusted basis, less than expected. Shares of United were up just under 1% in after-hours trading.
United executives will detail the results and outlook in a 10 a.m. ET earnings call Friday.
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