New York (CNN Business)United Airlines posted its third huge quarterly loss of the year, saying it is ready to “turn the page” and prepare for a recovery from the worst financial crisis ever faced by the airline industry.
The carrier posted a $2.4 billion loss excluding special items, slightly less the $2.6 billion it lost on that basis in the second quarter but a bit above analysts’ forecasts. Its net loss of $1.8 billion also exceeded the previous quarter’s loss.
Shares of United (UAL) were little changed in after-hours trading following the report.
The losses are due to the massive drop in air travel brought about by the Covid-19 pandemic, which has decimated the aviation industry. US airlines are expected to report about $10 billion in losses for the quarter. United is the second US airline to report results after Delta (DAL) announced a $2.1 billion operating loss Tuesday.
“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,” said CEO Scott Kirby.
Smaller cash burn
United said it trimmed the amount of cash it is burning through to a daily average of $25 million in the third quarter, down from $40 million per day in the second quarter.
The company was able to stem that cash drain because 9,000 employees took offers to leave the company voluntarily, and United reached deals with several of its unions to reduce labor costs and lower the number of involuntary furloughs.
Yet it still furloughed an additional 13,000 employees on October 1, the first day that federal prohibitions against involuntary job cuts in the industry ended. Those furloughs should reduce its cash burn further in the third quarter. But unlike Delta, which said Tuesday it expects to end its cash burn by spring, United gave no target date for when it expects to stop spending more cash than it brings in. Its executives will speak with investors Thursday morning.
Overall the company’s revenue tumbled 78% — less than the 87% drop in the second quarter.
United’s revenue collected from passengers, when adjusted for its 70% reduction in capacity, fell only 47%, which it said should be the smallest drop of any major US airline in that closely watched financial measure. Delta reported a 55% drop in that reading.
Since March United has raised $22 billion in cash through a sale of stock, the mortgaging of its frequent flyer program, federal loans and grants and other borrowing, and it ended the quarter with $13 billion in cash and the ability to borrow an additional $6 billion — actions that it said will position it to ride through the current crisis.
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