United Airlines does not expect business demand to get to normal until 2024. As the airline industry is nearly at a halt due to the coronavirus pandemic. Per Quintanilla, United CEO Scott Kirby revealed the prediction on a Thursday conference call reminding what some analysts predicted in April.
Despite the bleak forecast, Kirby expressed optimism at United’s trajectory moving forward on Thursday, saying the airline has “turned the corner” and “gotten through the initial phase of the crisis.”
“We can see the light at the end of the tunnel. It’s a long tunnel, it’s gonna have ups and downs.”
In its third quarter, United posted $1.8 billion in losses, averaging around $25 million a day, and was operating at 70 percent capacity compared to 2019. The reported losses, which were bigger than expected, follow United’s announcement last month that it will begin offering COVID-19 tests to passengers traveling from San Francisco to Hawaii.
Aviation Industry at A Halt
As air travel is at a halt and there are no signs of federal help. Therefore, United Airlines plans to furlough about 16,000 of its frontline employees.
United Airlines in a memo to its employees wrote that 16,370 employees will be furloughed. When the federal bailout restriction expires on October 1.
United executives said this furlough is less than half of the airline’s furlough that it forecasted in July. It is because 7,400 employees accepted early retirement to or voluntary departures. And some are taking unpaid leave.
Financial Loss Due to the Pandemic
However, this decrease in demand is causing the airlines massive losses. The Delta, United, American, and Southwest lost $10 billion between them in the second quarter.
United Airlines announced that it has lost $1.6 billion in the second quarter. As air travel was down because of the pandemic.
However, the airline’s net collection was just $1.4 billion in revenue. This is an 87.1 percent drop as compared to the same quarter last year, with capacity falling 87.8 percent.
But there was a somewhat positivity in the airline’s announcement. Things were not nearly as bad as they could have been.
Delta Air Lines also announced its second-quarter performance which is worse than United. However, the airline’s net loss for the quarter is $5.7 billion.