Downhill journey: United Airlines report record losses of $1.6B
Dark times continue for aviation companies as they find themselves under the heavy financial barrage from the COVID-19 crisis. On July 21, 2020, United Airlines announced the most difficult financial quarter in the company’s 94-year history with a Q2 net loss of $1.6 billion.
The sum total of operating revenues went down by 87.1% from last year, followed by a decline of 87.8% in capacity and 93.4% in passengers. The company announced that these losses have cost them an average of $40 million cash burn a day and $3 million in principal repayments and severance expenses.
The company hopes to catch a break, however, forecasting a decrease in cash burn down to $25 million for the Q3, expecting to finish with the lowest average daily loss among its competitors. With liquid assets approximating $15.2 billion as of July 20, 2020, and projecting an increase to $18 billion in Q3, the airline remains optimistic about their chances of successfully battling the worldwide crisis.
On July 14, even after making substantial changes to their overall costs, Delta revealed a net loss of $5.7 billion compared to United Airline’s $1.6 billion in the same period.
"While this unprecedented crisis has been difficult for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors,” CEO Scott Kirby commented, as the company’s losses were shown to be substantially lower than their peers’.
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