Mubasher: United Airlines reported losses worth $1.63 billion during the second quarter (Q2) of 2020, driven by a plunge in air travel demand due to the coronavirus pandemic. This is compared to $1.05 billion worth of profits during the same quarter last year, CNBC recently reported.
Revenue amounted to $1.48 billion in the three months ended 30 June, an 87% contraction from $11.4 billion during Q2-19, beating analysts’ estimates of $1.32 billion.
Moreover, the Chicago-based carrier could cut its cash burn to $25 million a day in Q3 from an average daily burn of $40 million in Q2 while the capacity is forecast to drop by 65% over Q3 when compared with the same quarter a year ago.
The carrier, along with other major airline competitors, is grappling with what are seen to be long-lasting impacts from the pandemic. A recovery in the air travel industry is challenged by a rise in coronavirus cases around the US as well as quarantine orders for travellers coming from many states to New York, New Jersey, Connecticut, and elsewhere.
“United believes it did the best job of matching actual capacity to demand among its largest network peers. The company also expects to finish the quarter with the lowest average daily cash burn among large network carriers,” the airline said.
The airline’s flights in July are expected to be a little less than half full, and no more than 15% of its flights will be over 70% full.
United’s payroll costs reached $2.17 billion in the second quarter, down by 29% from a year ago as employees worked fewer hours due to the reduced flight schedules and others took voluntary time off.
On a more positive note, United’s cargo revenue jumped by 36% annually to stand at $402 million by June-end.