United sinks with $2.1b loss heralding more airline pain

Bloomberg

United Airlines Holdings Inc tumbled after the company said it expected to record a $2.1 billion loss in the first quarter as the coronavirus outbreak all but erased air-travel demand in March.
The pretax loss, which will be about $1 billion on an adjusted basis, came as revenue dropped 17% from a year earlier to $8 billion, the carrier said in a regulatory filing. The results are preliminary and subject to change.
The airline’s early look at first-quarter results is the first for big US carriers and presages a gruesome set of earnings reports after flights were curtailed worldwide. Travel at US airports is about 5% of what it was a year earlier. Delta Air Lines is scheduled to release its earnings on April 22, with Southwest Airlines and American Airlines Group following next week.
United fell 6.7% to $27.14 in New York on April 20, the biggest drop on a Standard & Poor’s index of major US airlines. The shares had tumbled 67% this year through April 17.
The carrier filed the basic results, without balance sheet details, in an effort to be transparent, executives said on a call with reporters. A more detailed release is expected in coming weeks.
“The company plans to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand,” United said.
In the filing, United said it had applied for a loan from the US Treasury Department under a rescue programme for airlines, and expected to be able to borrow as much as $4.5 billion from the government through September 30 for a term of as long as five years.
That would complement $5 billion in payroll assistance the company disclosed last week.
United reiterated its expectation for 90% drop in
capacity next month, underscoring the likelihood of even deeper damage for major airlines as passengers continue to stay home because of the pandemic.