United Airlines has recorded a preliminary first quarter loss of $2.1 billion as the coronavirus continues to hit the airline hard. Indeed, a loss was expected after the airline announced on 20 March that it would slash April's international capacity by 95%.
United Airlines has a fleet of over 800 aircraft. The airline's hubs include Newark Liberty, San Francisco, Los Angeles, Chicago O'Hare among other international airports. It is among the top three largest airlines in the United States.
Air travel demand has plummeted and as such, United Airlines has applied for up to $4.5 billion in government loans through the CARES act in addition to approximately $5 billion worth of payroll grants and loans. Compared to last year, the airline says its revenue is down 17%.
In March, United Airlines had announced that it would slash international capacity by 95% for April. Now, it says that overall, it will only be operating 10% of its schedule for the months of May and June. In the last two weeks of March, the carrier was losing approximately $100 million a day.
United Airlines' shares have dropped 8% since the latest announcement. Meanwhile, United Airlines President, Scott Kirby and CEO, Oscar Munoz said that demand was at "essentially zero and shows no sign of improving in the near term."
The new preliminary first quarter loss also takes into account its investments in Latin America, a region which has also been significantly hit by the coronavirus crisis. United Airlines, among other US carriers, has warned that it may have to reduce its overall operation (including fleet size) if things don't start to recover by October.