Image source: United Airlines
By Tracy Rucinski, Ankit Ajmera
(Reuters) – United Airlines said on Wednesday it cut operating costs by 59% in the third quarter and had nearly $20 billion of liquidity to position it for an eventual recovery from the COVID-19 crisis that has hammered global airlines.
“We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” said United CEO Scott Kirby.
Chicago-based United said its daily cash burn slowed to an average $25 million in the quarter ended September from $40 million in the second quarter, and included $4 million per day in severance and debt payments.
The company had $19.4 billion of liquidity at Sept. 30, giving it some runway to weather a crisis that has pummeled air travel demand.
United furloughed thousands of employees this month as a second round of payroll relief from Washington has so far failed to materialize, but reached a deal with its pilots to avoid imminent furloughs.
“Even though the negative impact of COVID-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation,” Kirby said.
Revenue fell 78% to $2.49 billion, slowing from a plunge of about 87% in the previous quarter.
United said its quarterly loss was $1.8 billion, or $2.37 billion, or $8.16 per share, adjusted for one-time items, compared with adjusted net income of $1 billion, or $4.07 per share, a year earlier.
The airline will face increasing competition on its home turf next year after low-cost rival Southwest Airlines said this week it plans to add service at two United hub airports: Chicago O’Hare and Houston’s George Bush Intercontinental.
Reporting by Tracy Rucinski in Chicago and Ankit Ajmera in Bengaluru; Editing by Devika Syamnath and Matthew Lewis.
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Source: Reuters
