Economy

United Airlines reports worst ever financial quarter

United Airlines reports worst ever financial quarter”

United is bolstering its cash position and said it would have more than US$18 billion of liquidity by the end of the third quarter.

Cash burn during the second quarter averaged $40 million a day, including $3 million of principal payments and severance expenses.

"While this unprecedented crisis has been hard for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors", Kirby said.

With its announcement Tuesday, United became the second US carrier to report earnings for the period spanning April-June.

United last week warned 36,000 employees that they could be furloughed in October. Roughly 6,000 of its workers, it added, have so far volunteered for the package that promises pay through November.

Cases have surged in many parts of the country, prompting fresh quarantine orders in some states and forcing some states to scale back reopening plans. United Airlines took note and is now working to maximize the airflow volume of its carriers beginning July 27.

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USA airlines have seen an even sharper drop in global travel. Its revenue plunged 89 per cent in the second quarter, pushing the Chicago company to a USD1.6 billion loss.

Kirby and American Airlines CEO Doug Parker appealed on Tuesday to Vice-President Mike Pence and European Commissioner for Home Affairs Ylva Johansson to allow more travel between the USA and Europe.

The U.S. airline leaders, joined by the CEOs of Lufthansa and British Airways' parent, IAG, said transatlantic travel is important to their airlines and the global economy. They said steps taken by airlines and governments together with a co-operative health-screening program will prevent COVID-19 from spreading among passengers. Delta, JetBlue, and other airlines say they already have similar requirements. That is on top of $5 billion in taxpayer money to keep workers on the payroll through September. Labor costs were lower by almost $900 million.

United's loss, adjusted to exclude an income tax benefit and other items, was $2.6 billion. Analysts had forecast the company to print an even lower £1.04 billion in revenue in the second quarter. And since May, United has been contacting customers via email and through the United app - as much as 24 hours in advance - if their flight is expected to be more than 70% full and gives them options to switch to different, less full flights for no additional fees.

Delta Air Lines Inc last week reported a record loss in the second quarter.

As the Dallas and Fort Worth, Texas-based duo of Southwest Airlines and American Airlines release their own earnings reports on Thursday, this will be a theme to follow.



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