By Tracy Rucinski
(Reuters) – United Airlines Holdings Inc on Wednesday reported a fourth straight quarterly loss as the coronavirus pandemic continued to upend the travel industry and said it aims to cut about $2 billion of annual costs through 2023 as it charts a recovery plan.
Airlines are counting on COVID-19 vaccines to boost travel demand later this year but warn that the strength of a rebound will largely depend on the pace of vaccine rollouts, particularly as coronavirus cases keep rising.
Chicago-based United’s adjusted net loss was $2.1 billion, or a loss of $7 per share, in the fourth quarter ended Dec. 31, compared with a profit of $676 million a year earlier.
Analysts on average had estimated a loss of $6.60 per share, according to IBES data from Refinitiv.
Total operating revenue fell 69% to $3.4 billion, in line with forecasts. In the current quarter, United said it expects revenue to fall by 65% to 70% from a year ago and its flight capacity to shrink by about 51%.
United burned a total average of $33 million per day in the fourth quarter, including about $10 million of severance and debt payments, even as it continued to slash costs.
The company furloughed thousands of employees last October when an initial round of payroll aid for airlines expired. United brought back those workers following a fresh $15 billion in payroll aid for the sector through March but warned the recall could be “temporary” as travel demand remains depressed.
It has said cost control will remain key as the industry awaits a recovery.
Rival Delta Air Lines, which last week labeled 2021 a year of recovery, expects to halt its daily cash burn rate of about $12 million in the spring.
United, which will hold an investor call on Thursday, had $19.7 billion of liquidity as of Dec. 31 and expects to have a similar amount at the end of March, it said.
It has the greatest exposure of major U.S. airlines to international travel, the sector hardest hit by the pandemic and the one likely to be the slowest to recover.
U.S. President Joe Biden, who was inaugurated on Wednesday, plans to maintain a ban on travelers from Europe and Brazil that his predecessor, Donald Trump, had signed an order to lift beginning on Jan. 26.
American Airlines and Southwest Airlines are due to report quarterly results on Jan. 28.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Shreyasee Raj in Bengaluru; Editing by Matthew Lewis)
