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United Airlines’ share fell by more than 2% in after-hours trading after the airline failed to meet Wall Street expectations and recorded a quarterly loss of $ 1.4 billion. CEO Scott Kirby promised a “clear path to profitability” in the coming days, while the country would begin to move under the COVID-19 pandemic.
He noted that the last year of the coronavirus shutdown was the “most disruptive crisis” the industry has ever faced, and Kirby said in a statement that United were “ready to emerge from this pandemic with a future that brighter than ever. “
Kirby will address airline analysts and investors in an earnings call at 9:30 a.m. Tuesday and will likely repeat that he sees strong evidence of pent-up air travel demand in the coming weeks and months.
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United started 2021 with a fifth consecutive quarterly loss of $ 1.4 billion, although the loss decreased from $ 1.7 billion a year ago. On an adjusted basis, the company reported a net loss of $ 2.4 billion.
Operating revenue for the quarter fell to $ 3.2 billion from $ 7.9 billion a year ago, and passenger traffic fell by 52% compared to the same period a year ago.
The company ended the quarter with $ 21 billion in available liquidity after an average daily cash burn of $ 9 million, an improvement of about $ 10 million per day compared to the previous quarter.
During the three-month period ending March 31, United recorded $ 417 million in costs related to the continued payment and benefits provided to approximately 4,500 employees who chose to voluntarily separate from the company.
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Despite the recent loss, United expects adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to be positive later this year, even though international and long-term demand will remain 70% below the 2019 level.
The company says it is ready to capitalize on the emerging demand for travel to countries where vaccinated travelers are welcome. The company said on Monday it would launch international flights to Greece, Iceland and Croatia, pending government approval.
In the first quarter, United announced 41 new domestic routes and two new international routes. It also launched six new domestic routes and four new international routes, with another 13 international routes planned later this year. In addition, the airline resumed uninterrupted service for 12 additional domestic routes and five international routes.
In May, the company plans to fly about 52% of its full schedule compared to the same period two years ago. The company is also expanding its global route network later this year with an uninterrupted service between Boston Logan International Airport and London Heathrow Airport.
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Looking ahead, the company expects that flight capacity in the second quarter will reach 45% of the 2019 levels and that total revenue per available seat mile will decrease by about 20% compared to the same period two years ago.
Quarterly operating expenses, excluding special expenses, are forecast to decrease by approximately 32% compared to the same period two years ago, including fuel prices of approximately $ 1.83 per liter in the second quarter.
The company’s adjusted EBITDA margin is expected to be around 20% in the second quarter. United aims to exceed its adjusted EBITDA margins for 2019 by 2023.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| UAL | UNITED AIRLINE LINES | 54.99 | -0.88 | -1.58% |
Following the announcement, shares in United fell 2% in trading hours. United executives will discuss first-quarter results during a call for analysts on Tuesday at 10:30