United Airlines reported ‘strong evidence’ of the pent-up demand for air travel and was positioned to benefit from a recovery in business and international flights.
The airline said on Monday that it was “already taking advantage of the rise in demand from countries where vaccinated travelers are welcome,” pointing to newly announced international flights to Greece, Iceland and Croatia, which are subject to the government approval.
In a statement accompanying the announcement of earnings in the first quarter, the company said that these “opportunistic steps” help to position it “to return to positive net income, even if international and long-term demand will only returning to about 35 percent of the 2019 levels ”.
CEO Scott Kirby said: ‘We have shifted our focus to the next milestone on the horizon and now see a clear path to profitability. We are encouraged by the strong evidence of the pent-up demand for air travel and our continued ability to adapt quickly to it. ”
United reported a 60 percent drop in total revenue to $ 3.22 billion in the first three months of 2021, which was just $ 38 million lower than the average forecast among analysts surveyed by Refinitiv. Its reported net loss decreased to $ 1.36 billion, compared to a loss of $ 1.7 billion a year earlier, and Wall Street predicted a loss of $ 1.62 billion.
The company said that capacity in its first network decreased by 54 percent during the first quarter compared to the same period of three months in 2019. The forecast was that the capacity during the current quarter would be about 45 percent lower than the second quarter of 2019. Total revenue per available seat mile, a popular measure for the industry, is expected to be about 20 percent lower this quarter than in two years ago.
United shares fell about 2 percent in the after-trading.
With an increasing number of Americans receiving vaccines, the number of airline passengers has recovered to about the highest levels since the pandemic suppressed air travel a year ago.
United are responding to some of the encouraging trends and said earlier this month that it plans to re-employ pilots in May in an effort to meet the growing demand. The airline said last week that it would repay some of the taxpayers’ money it borrowed during the height of the coronavirus pandemic after conducting a successful $ 9 billion fundraiser across the bond and loan markets.