United Airlines takes $2.1B hit as coronavirus clips Latin American growth

United Airlines takes $2.1B hit as coronavirus clips Latin American growth

United Airlines said on Monday it expects to report a pre-tax loss of about $2.1 billion for the first quarter, after the coronavirus pandemic smothered its growth aspirations in Latin America and led the company to seek another $4.5 billion in government aid.

Chicago-based United said first quarter revenues are seen at $8 billion, down 17 percent from a year earlier, with the bulk of the declines in the last two weeks of March as coronavirus outbreaks accelerated globally, causing an average daily revenue loss of $100 million.

The results are preliminary and final first-quarter numbers may change, it said, without disclosing a date for publication.

Delta Air Lines and Southwest Airlines are to report first-quarter results this week.

All US airlines are seeking government money to help them weather what they say is the worst crisis in the industry’s history. With few people flying, United said it plans to operate only about 10 percent of its normal schedule in May and June.

In addition to $5 billion it will receive from the US government to cover payroll through Sept. 30, United said it also expects to borrow up to about $4.5 billion from the Treasury Department for up to five years.

Once the terms are finalized, it will have until the end of September to decide whether to draw the money. If it borrows the full amount, United would issue warrants for the Treasury to buy 14.2 million shares at its April 9 closing price of $31.50 per share.

Shares in United were down 2.9 percent, at $28.24, in early-afternoon trading.

Latest Category Posts