By Tracy Rucinski
January 20 (Reuters) – United Airlines Holdings Inc reported a fourth consecutive quarterly loss on Wednesday as the coronavirus pandemic continued to affect the travel industry and said it plans to cut about $ 2 billion in annual costs. until 2023, while drawing up a recovery plan.
Airlines are relying on COVID-19 vaccines to boost travel demand later this year, but warn that the strength of a recovery will largely depend on the pace of vaccine release, mainly because coronavirus cases continue to increase.
Adjusted net loss for Chicago-based United was $ 2.1 billion, or a loss of $ 7 per share, in the fourth quarter ended December 31, compared to a profit of $ 676 million a year earlier.
Analysts, on average, estimated a loss of $ 6.60 per share, according to IBES data from Refinitiv.
Total operating revenue fell 69% to $ 3.4 billion, in line with forecasts. In the current quarter, United said it expects revenue to drop 65% to 70% over the previous year and its flight capacity to decrease by about 51%.
United burned a total average of $ 33 million a day in the fourth quarter, including about $ 10 million in damages and debt payments, even as it continued to cut costs.
The company laid off thousands of employees last October, when an initial round of airline payroll assistance expired. United brought these workers back after a new $ 15 billion payroll aid to the sector through March, but warned that the recall could be “temporary” as travel demand remains low.
She said that cost control will remain critical while the industry expects a recovery.
Rival Delta Air Lines, which last week labeled 2021 as a recovery year, hopes to break its daily cash consumption rate of around $ 12 million in the spring.
United, which will make an investor call on Thursday, had $ 19.7 billion in liquidity on December 31 and expects to have a similar amount by the end of March, the agency said.
It has the largest exposure of major U.S. airlines to international travel, the sector most affected by the pandemic and which is likely to recover the slowest.
U.S. President Joe Biden, who took office on Wednesday, plans to maintain the ban on travelers from Europe and Brazil that his predecessor, Donald Trump, had signed an order to suspend from January 26.
American Airlines and Southwest Airlines are due to release quarterly results on January 28. (Reporting by Tracy Rucinski in Chicago Additional reporting by Shreyasee Raj in Bengaluru Editing by Matthew Lewis)