United Airlines tumbles 9% as business and international travel recovery is still a long way off

Shares of United Airlines fell more than 9% on Tuesday morning after the airline reported its fifth consecutive quarterly loss, and its chief executive expressed uncertainty about when two key parts of the coronavirus pandemic business would recover.

CEO Scott Kirby said long-term demand for international and corporate travel was declining by about 80% compared to 2019 levels, depriving the carrier of high-paying customers it relied on before the crisis.

“The big question is when will those two things come back and we do not know when they are,” Kirby said in an interview with CNBC’s “Squawk Box.” He said both segments are likely to start recovering during the summer and during the second half of the year.

The airline on Monday reported a loss of $ 1.4 billion for the first quarter, saying it could reach profitability, even if long-term demand for international and business travel returns to 35% from the 2019 level.

United on Monday announced new flights to countries that have begun opening their borders such as Greece, Iceland and Croatia, and Kirby said the airline had strong bookings for the flights after being offered for sale.

However, the State Department still recommends that travelers reconsider foreign travel. On Monday, it said it would increase 80% of the world’s travel advice ‘, citing the Covid-19 pandemic “an unprecedented risk for travelers”.

Domestic leisure travel bookings to popular holiday destinations such as beaches have surpassed 2019 levels, Kirby said.

Vacationers flying within the U.S. have led to the recovery of travel as more people are vaccinated, governments relax travel restrictions and reopen tourist attractions. But companies still do not have many of their employees on the road, and international travel bans or quarantine requirements still keep many travelers closer to home.

“I do not know how people find hotels,” Kirby said of popular holiday destinations.