United Airlines (NASDAQ:UAL) on Tuesday said it lost $1.63 billion during the second quarter, driven by a plunge in air travel demand because of the coronavirus pandemic. During the same quarter last year it posted a $1.05-billion profit.
Revenue plunged to $1.48 billion in the three months ended June 30, an 87% drop from $11.4 billion during the same time last year. The sharp decline in sales wasn’t as bad as feared, beating analysts’ estimates of $1.32 billion.
The Chicago-based carrier and other large airline competitors that spent years building up their networks are grappling with what are expected to be long-lasting impacts from the pandemic.
United said it expects to reduce its cash burn to $25 million a day in the third quarter from an average daily burn of $40 million in the second quarter. The carrier has slashed thousands of flights and idled scores of planes to cut its costs.
The carrier said its capacity in the third quarter will likely be down 65% compared with the same quarter a year ago.
A recovery in air travel is challenged by a spike in coronavirus cases around the U.S. as well as quarantine orders for travelers arriving from a host of states to New York, New Jersey, Connecticut and elsewhere.
United said it will "proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand," which executives expect to be limited until there is a treatment or vaccine for the virus.
UAL shares had their wings clipped 64 cents, or 1.9%, to $32.43.
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