United Air posts smaller loss after variant wrecks profit plan

Bloomberg

United Airlines Holdings Inc posted a narrower loss than analysts had expected as a dip in demand from a summer surge in the coronavirus delta variant proved fleeting.
The carrier lost $1.02 per share, or $300 million, in the third quarter on an adjusted pretax basis, better than the $1.61 loss analysts had estimated, according to figures compiled by Bloomberg.
Pandemic-driven losses persisted for a seventh quarter at United, which as recently as July had predicted a profit for the latter half of 2021 based on strong demand from leisure travelers and a gradual return of corporate road warriors. But that was before a summer wave of Covid-19 infections and hospitalisations caused an industrywide sales slowdown. United had warned investors September 9 that its planned profit would turn into red ink due to this change in business conditions.
The United loss contrasts with a small, $194 million profit that Delta Air Lines Inc. reported last week at the same time it jarred investors with a warning that fuel prices could lead to another loss in the fourth quarter.
United’s third-quarter operating revenue was $7.8 billion, down 32% from the same period in 2019. Analysts had predicted $7.6 billion.
United said it would fly 77% of its 2019-level capacity in the fourth quarter, with revenue expected to decline as much as 30% compared to the same period in 2019.
The largest US airlines have pinned their recovery hopes on a robust rebound in international and business travel next year, and were cheered by the recent US decision to allow vaccinated air travellers from Europe to enter the country as of November 8. That policy change by President Joe Biden’s administration could boost carriers’ traffic during the typically slow winter season.
As of the week ending on
October 17, commercial airline traffic in the US remained 19% below 2019 levels, FlightAware LLC, a Houston-based aviation-data firm, said.