United Airlines reports fifth consecutive quarterly loss while travel demand starts to recover
A United Airlines Boeing 737 Max 9 aircraft lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.
Justin Sullivan | Getty Images
United Airlines on Monday reported its fifth consecutive quarterly loss, though travel demand has recently improved as Covid-19 vaccinations ramp up and governments loosen travel restrictions.
The company posted a $1.36 billion net loss for the first quarter on $3.22 billion in revenue, which fell nearly 60% from the close to $8 billion in sales it generated in the first quarter of 2020. United’s per-share loss on an adjusted basis came in at $7.50, above the $7.08 per share loss analysts expected.
Here’s how United performed in the first quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted loss per share: $7.50 versus an expected loss of $7.08 a share
- Total revenue: $3.22 billion versus $3.26 billion expected
The Chicago-based airline said it will likely be able to return to positive adjusted earnings before interest, debt interest, taxes, depreciation and amortization, or EBITDA, even if business and international travel demand only gets back to about 65% of 2019 levels.
“We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability,” CEO Scott Kirby said in an earnings release. “We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it, which is why we’re as confident as ever that we’ll hit our goal to exceed 2019 adjusted EBITDA margins in 2023, if not sooner.”
United said it expects its second-quarter capacity to be down 45% from the same period in 2019, compared with a 54% decline in the first quarter from the same period two years ago. It expects revenue per seat mile, a measure of how airlines are generating revenue compared with capacity, to fall 20% in the second quarter from 2019, the carrier said.
Fuel costs continue to weigh on the airline and its competitors.
United shares were off about 2% in after-hours trading.
The company’s executives will discuss results in a 10:30 a.m. ET call on Tuesday.
Correction: This story was updated to correct the quarter United used to compare its revenue. It was the first quarter of 2020.
