United Airlines Holdings expects to burn $25 million every day until at least October—and that’s the good news.
After the COVID-19 pandemic grounded most air travel this spring, United spent the past three months burning an average of $40 million a day, or about $1.2 billion a month. By mid-June, United was telling investors that it hoped to get its daily cash burn down to about $30 million in the third quarter—a goal that it now plans to improve upon, the company said Tuesday, as it reported its second-quarter results.
The rest of those results, for what United called “the most difficult financial quarter in its 94-year history,” were about as grim as expected. The airline swung to a second-quarter loss of $1.6 billion, or $2.6 billion on an adjusted basis, versus a year-ago profit of $1.1 billion. Revenues plummeted 87% from $11.4 billion a year earlier, to $1.5 billion.
“While this unprecedented crisis has been difficult for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors,” CEO Scott Kirby, who officially took over from predecessor Oscar Munoz in May, said in a news release.
As many as 36,000 United employees could lose their jobs after the end of September, after federal payroll aid expires, the airline warned workers earlier this month. More than 6,000 employees have so far accepted “voluntary separation packages,” United said Tuesday.
United is the second major U.S. carrier to report its second-quarter losses this month, after Delta last week and before American Airlines reports its results on Thursday.