United Airlines Sheds $1.8 Billion As Pandemic Continues To Hammer Aviation
(Photo : REUTERS/Chris Helgren/file photo)
United Airlines' financial burden grew heavier as a slight recovery in air travel proved short-lived - dragging the company to a loss of $1.84 billion in the normally robust third quarter.
United said sales dropped nearly 80% from the previous year. The decline was worse than market observers had estimated.
Despite the loss, United Airlines said it was ready for a turnaround and had been trimming costs and shoring up its financial reserves - securing more than $22 billion through stock issuance and government stimulus.
The results from United validated the harm that the world health emergency is doing to the airline business. Seven months since the coronavirus outbreak, air travel in the U.S. remains down 65% from a year ago. Damage in the once bustling business travel is even worse.
According to United Airlines chief executive officer Scott Kirby, although the ill effects of the virus will linger the company was now "focused on a strong recovery that will allow United Airlines to bring our furloughed staff back to work and emerge as a global leader in aviation," Gulf News quoted him saying.
United Air executives are optimistic that shareholders are less interested in the losses and more focused on what the carrier plans to do to boost its competitive position when air travel demand normalizes.
The Chicago-based carrier said it had almost $20 billion in cash - having been granted a $6.8 billion loan from private groups and raised its capacity to secure another $5.2 billion from the U.S. Treasury.
The airline started temporarily laying off 13,000 employees Oct. 1 and several thousand others have agreed to voluntarily leave.
Meanwhile, United said the 2,700 corporate positions it cut since the pandemic likely will not be replaced - even once air demand starts to recover.
The carrier said it has laid off around 22,000 of the 96,000 staff it employed at the end of 2019 through a series of early retirement and voluntary leave programs, the Chicago Tribune reported.