United Airlines lost $1.4 billion in the first quarter but sees a path to profitability as customers return to air travel in greater numbers.
The Chicago-based carrier on 19 April reports $3.2 billion in revenue during the first three months of 2021, down 66% from $9.6 billion in the first quarter of 2019.
In the first quarter of 2020, just as the coronavirus pandemic overtook the globe, the company scored $8 billion in revenue.
“We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability,” says United chief executive Scott Kirby. “We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it.”
The company is “confident as ever” that in 2023, if not sooner, it will exceed its 2019 adjusted earnings, Kirby says. Adjusted earnings exclude the impact of interest, taxes, depreciation and amortisation.
United ended the quarter with $21 billion in liquidity. During the period, it slashed cash burn by roughly half, to an average of $9 million daily.
Capacity during the first quarter was down 54% from the first quarter of 2019.
But United sees improvement in the months ahead. It predicts its second-quarter capacity will jump nine points, to 45% lower than in the second quarter of 2019. In May, United plans to fly 52% of its full schedule.
The airline recently announced the launch of 41 new domestic routes, to capitalise on an expected surge in demand from customers restless to travel following a year of stay-at-home orders and travel restrictions.
United is also expanding international flying and “moving to capitalise on emerging pent-up demand for travel to countries where vaccinated travelers are welcome”. It announced new flights to Iceland, Greece and Croatia earlier on 19 April, and last month said it was resuming flights and increasing frequencies to Latin America.
The airline said in March it will fly 46% of its pre-Covid international schedule in May and that it is set to exceed its pre-pandemic schedule to Latin America.
But the global health crisis is far from over. While the vaccination campaign in the USA is in full swing, with vaccines available to every adult from 19 April, other countries are lagging. In Brazil, for example, case numbers are again rising rapidly, causing some airlines to cancel flights. In Europe, a slow vaccination roll-out is hindering a return to pre-pandemic travel activity and sustainable recovery.
United will hold an earnings call on 20 April to provide more details about its quarterly results and outlook.