United Slows Cash Burn With Flight Trims--Update

By Doug Cameron 

United Airlines Holdings Inc. said Tuesday that it will trim more flying this quarter in response to the stall in demand while cost-cutting efforts will reduce how much cash it burns moving into the fall.

Chicago-based United reported a quarterly loss of $1.6 billion and said it plans to fly 35% of its schedule in the three months through September, in line with its existing guidance for August after the airline reduced planned flying because of rising Covid-19 cases in many parts of the country.

United cut more capacity than rivals such as Delta Air Lines Inc. and American Airlines Group Inc. in response to the collapse in travel demand during the spring, and said it's faring better in matching current supply with those still prepared to fly.

The airline said it expects to burn through an average of $25 million a day in cash in what is traditionally the industry's strongest and most profitable quarter, down from $40 million in the three months to June 30.

United Chief Executive Scott Kirby has been among the most cautious about an industry recovery, and the airline recently warned it may have to shed almost half its domestic workforce -- some 36,000 staff -- unless demand recovers and it can persuade enough employees to take voluntary packages. United said Tuesday that around 6,000 have so far accepted.

The airline's downbeat outlook led it to secure government grants and loans and raise debt and equity from the private sector. It expects to end the September quarter with $18 billion in available liquidity, though this includes the potential proceeds of a government loans that it has yet to decide whether to accept,

United reported a net loss of $1.63 billion for the June quarter compared with a profit of $1.05 billion a year earlier. The per-share loss of $5.79 compares with a year-ago profit of $4.02. Revenue fell 87% to $1.48 billion.

The company's shares broke a three-session decline to close up 2.3%, and were recently down 1.5 in after hours trade.

Write to Doug Cameron at [e-mail]

(END) Dow Jones Newswires

July 21, 2020 16:58 ET (20:58 GMT)

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