United Airways Experiences $1.eight Billion Loss However Seems Forward To Friendlier Skies
Thursday October 15, 2020
As the coronavirus pandemic continues to weigh heavily on the travel industry financially, airlines are trying to shift their focus from stopping bleeding to planning a recovery. Confident Scott Kirby, United Airlines CEO, says recovery is “now visible” on the horizon, “although that recovery still seems a long way off.” The light at the end of the tunnel is far away, but this is it Tipping point, “Kirby told reporters and analysts on a conference call Thursday. One reason for the optimism is that United can now test travelers at The airport for the coronavirus with results in 15 minutes to see if a passenger was infected before the The quick tests are only carried out at the San Francisco airport for travelers traveling to Hawaii. If the test is negative, the traveler must upon arrival in Hawaii, which the tropical island state required of all arriving travelers, Do not quarantine for 14 days. United Airlines executives say news about the rapid test program resulted in a test Increase in bookings to Hawaii. However, the bleeding is currently continuing. United reported that weaker than expected demand for air travel during the summer months resulted in an above-expected loss of nearly $ 2 billion in the third quarter. On Tuesday, rival Delta Air Lines reported a loss of more than $ 5 billion in the third quarter. The number of people flying commercially has fallen since March. According to the Airlines for America industry group, air travel demand fell 94% at one point in April, and after a brief spike in June and early July, demand fell 65% to 70% in August and September compared to previous months Year. And that depresses the bottom line of the airlines. Total revenue for the third quarter was down 78%, according to United, with passenger revenue declining 84% from July, August and September last year when the airline posted more than $ 1 billion in profit.
The only bright spot was a 50% increase in air freight sales. Although United cut operating costs by nearly 60%, the airline burned cash at the rate of $ 25 million per day in the third quarter. That’s less than a cash burn rate of $ 40 million a day in the second quarter. United began vacationing 13,000 employees on October 1, when a federal payroll support program expired, and talks to extend that aid remain stalled. United has promised to put these employees on leave if Congress and the White House reach an agreement that the airlines will receive additional aid soon. Kirby says the coronavirus pandemic sparked “the worst financial crisis in aviation history” and admits that the “negative effects of COVID-19 are likely to continue in the near future”. “We won’t get through this until there is a widespread vaccine, probably by the end of next year, so we have [another] 12 to 15 months of pain, sacrifice and difficulty, “said Kirby.” But we did everything in the early stages to have trust, and it’s really about trust to get through the crisis and to the other side. “Aviation industry analysts and airline executives say there seems to be a pent-up demand for air travel as many people enjoy flying and escaping even for short trips. They expect warm weather recreational destinations to lead to a recovery in air travel A burden for United and its main competitors Delta and American Airlines has been the sharp decline in the more profitable business travel sector. Many business travelers tend to book later, even at the last minute, and are willing to pay higher prices for better timetables and perks like business class seating. According to United, business travel has fallen 85% to 90% due to the pandemic, and Kirby doesn’t expect it to recover as quickly as vacation travel. “Business travel is incredibly imp important to United,” Kirby said. “It was beforehand our bread and butter. I think it will be our bread and butter in the future. [But] It will be a few years before things get serious again. “He added that he doesn’t expect business travel to recover to near pre-pandemic levels by 2024. But Kirby disagrees with those who believe in Zoom, GoToMeeting, and other video conferencing platforms are replacing face-to-face business meetings and sales pitches.” We’re social Essence. And I think demand will return, “said Kirby.” I liked to say that the first time someone loses a sale to a competitor who has popped up in person is the last time they try to make a sales call Zoom In. ”
Copyright 2020 NPR. Further information is available at https://www.npr.org.
KPBS ‘daily news podcast on local politics, education, health, the environment, border and more. New episodes are ready on weekday mornings so you can overhear your morning commute.
Download Acrobat Reader to view PDF documents.