© Reuters. FILE PHOTO: A United Airlines passenger jet takes off with the setting of New York City
(Reuters) -United Airlines on Monday reported a larger-than-expected $ 2.4 billion adjusted net loss in the first quarter, driven by rising fuel costs and fewer flights operating in the wake of demand. demand remains weak due to the COVID-19 pandemic.
Average fuel cost increased by nearly 30% to $ 1.74 / gallon in the quarter compared with the previous three months, while passenger traffic decreased 52% year-on-year in 2020. The World Health Organization did not state declare COVID-19 a pandemic until near the end. of the first quarter in 2020.
United Airlines said it expected fuel costs to increase by 5% in the second quarter.
The airline, however, forecasts profitability again later this year and says it hopes to reinstate some capacity cuts as more people are ready to travel.
Capacity will reach 45% of 2019 levels in Q2 2019, United said.
According to IBES data from Refinitiv, United’s adjusted net loss was about $ 2.40 billion in the first quarter, compared with analysts’ average estimate of a loss of about $ 2.23 billion.
United Airlines CEO Scott Kirby (NYSE 🙂 said in a statement that the airline now sees “a clear path to profitability.”
United shares are down 1.8% in aftermarket trading.
Rival Delta Air has also pointed out that fuel costs are partly higher due to quarterly losses and is hoping for profits by the end of 2021 when the rapid COVID-19 vaccination is expected to spur tourism. air.
United said earlier on Monday that it added three flights to Croatia, Greece and Iceland, which are one of the countries that reopen to vaccinated tourists.
The Chicago-based carrier expects adjusted pre-interest income, taxes, amortization and amortization to see positive returns by the end of the year even as international long-haul business and business demand remains below 70. % compared to 2019 levels.
United forecasts total unit revenue in the second quarter, compared to revenue and air capacity, to decline by 20% year-on-year in 2019. This will be less than the 27% drop in the first quarter.
The company expects core cash flow to remain positive for the remainder of 2021 after turning positive in March.
Total revenue fell 66% to $ 3.2 billion in the quarter, compared with the same period in 2019.
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