By Tracy Rucinski
January 20 (Reuters) – United Airlines Holdings Inc reported a fourth consecutive quarterly loss on Wednesday as the coronavirus pandemic pushed the travel industry further, saying it intends to cut annual costs by about $ 2 billion by 2023, as it maps a recovery plan.
Airlines are counting on COVID-19 vaccines to increase travel demand later this year, but warn that the strength of a rebound largely depends on the rate of vaccination, especially as coronavirus cases continue to rise.
Chicago-based adjusted net loss in the fourth quarter ended December 31 was $ 2.1 billion, or a loss of $ 7 per share, compared to a profit of $ 676 million a year earlier.
Analysts have averaged an average loss of $ 6.60 per share, according to IBES data from Refinitiv.
Total operating income fell 69% to $ 3.4 billion, according to forecasts. In the current quarter, United said it expects revenue to fall by 65% to 70% from a year ago and to shrink its flight capacity by about 51%.
United burned a total of $ 33 million a day on average in the fourth quarter, including about $ 10 million in severance and debt payments, though it still reduced costs.
The company harassed thousands of employees last year when an initial round of payment assistance for airlines expired. United brought the workers back to a new $ 15 billion salary hike from March to March, but warned that the recall could be ‘temporary’ as travel demand remains depressed.
The company said cost control will remain key as the industry awaits recovery.
Competitor Delta Air Lines, which last week described 2021 as a year of recovery, expects to halt its daily cash burn rate of about $ 12 million in the spring.
United, which will hold an investor call on Thursday, had $ 19.7 billion in liquidity on December 31 and expects to have a similar amount by the end of March.
It has the largest exposure to U.S. travel services to international travel, the sector hardest hit by the pandemic, and the one likely to recover the slowest.
U.S. President Joe Biden, who was inaugurated on Wednesday, plans to enforce a ban on travelers from Europe and Brazil that his predecessor, Donald Trump, signed an order to lift on January 26.
American Airlines and Southwest Airlines are due to report quarterly results on January 28th. (Reporting by Tracy Rucinski in Chicago Additional Reporting by Shreyasee Raj in Bengaluru, Edited by Matthew Lewis)