United Airlines executives said on Wednesday that travel demand will increase when the number of new coronavirus cases start reducing. But airline revenue will stall around 50% of pre-pandemic levels until there is a vaccine.
However, United can settle for 50 percent passenger demand right now. Its revenue fell by 89 percent in the second quarter causing the company to $1.6 billion loss.
The demand for air travel was gradually recovering. But when the number of coronavirus cases increased in the US especially in the Sun Belt, starting around late June, there is again a decline in air travel.
New York, New Jersey, and Connecticut now require visitors from 31 states to quarantine themselves for 14 days upon arrival, and other states have similar edicts.
On Tuesday, about 530,000 people were recorded that passed through the US airport security checkpoints. It is the lowest number of passengers in July other than the Independence Day holiday. However, it is 78 percent down as compared to last year.
United executives said the setback will be only temporary.
“We do expect that demand recovery, which stalled in recent weeks, will begin to recover again when new cases start to fall. Quarantines are lifted, and borders are reopened,” Andrew Nocella, the airline’s chief commercial officer, said on Wednesday.
Nocella said United’s profit will increase to 50 percent of normal “overtime” and stay there until there is a vaccine for COVID-19.
United and other airlines are taking all safety measures and trying to tell the customers that air travel is safe. CEO Scott Kirby said that filtration systems and air-flow patterns inside planes make them safer than restaurants, office buildings, or even a hospital.
“It really is one of the safest places you can be if you are going to leave your house,” Kirby said.
Booking Full Capacity
However, United and American Airlines are booking the Seats to full capacity. Whereas Delta, Southwest, and JetBlue are blocking some seats to practice social distancing.
United said it limits full flights by substituting larger planes, 4,000 times in May and June, it said.
The airline was flying with 35 percent full capacity from April through June. And it predicts the July average will be 45 percent.
The airline is also expanding its rule on face coverings. Therefore, passengers will have to wear face masks at ticket counters. And baggage-claim areas and in its airport lounges as well otherwise the airline will ban them from flights.
Delta, JetBlue, and other airlines say they already have similar requirements. All of them require passengers other than small children to wear a mask during flights except while eating or drinking.
Kirby said United has seen “very high compliance” with the rule during flights.
“We have had fewer than 30 that we have had to actually take action against,” he said. “We will welcome them back when this is all over and masks aren’t required.”