MIAMI – United Airlines (UA) closes 2020 with an overall loss of US$7bn, declaring a loss of US$1.9bn in Q4 and losing US$33m per day.
As a result, the Chicago-based airline plans a US$2bn cut due to the crisis generated by the pandemic. A common theme, airlines around the world hope vaccinations will roll out quickly to reopen as many flights as possible this year. However, everything hangs on the rate of vaccine production by various pharmaceutical companies.
Statement from United Airlines
The carrier stated that “2021 would be a “transition year that’s focused on preparing for a recovery.” Its shares fell 2% in after-hours trading as of yesterday.
united Airlines CEO Scott Kirby said, “COVID-19 has changed United Airlines forever.” The airline is set to receive about US$2.6bn in payroll support through March, and it expects to offer employees options such as voluntary leave to reduce furloughs after that time.
Costs and Revenues
As mentioned in businessinsider.com, UA’s adjusted net loss was US$2.1bn, or a loss of US$7 per share, in the fourth quarter ending December 31, compared with a profit of US$676m a year earlier. This amounts to a loss of US$6.60 per share, according to IBES data from Refinitiv.
Furthermore, total operating revenue fell 69% to US$3.4bn, in line with forecasts. In the current quarter, UA says it expects revenue to fall by 65% to 70% from that of a year ago and its flight capacity to shrink by at least 51%.
Finally, the airline had US$19.7bn of liquidity as of December 31 and expects to have a similar amount at the end of March, it said.
Featured image: United Airlines Boeing 777-300ER. Photo: Luca Flores/Airways