United Airlines is posting a $2.1 billion loss for the first quarter of 2020 as the coronavirus decimates the demand for flights, according to a CNBC report on Monday (April 20).
United is the first of the big airlines to discuss quarterly results amid the pandemic. Its preliminary numbers reflect the negative impact on demand for air travel as stay-at-home orders are in place in most of the world.
Compared to the same quarter in 2019, United said revenue is $8 billion, down 17 percent. Adjusted, the airline said it has lost about $1 billion.
The Chicago-based airline said it is still waiting on about $5 billion from the airlines’ Payroll Support Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. United also applied for a maximum of $4.5 billion in government loans. About $3.5 billion is anticipated to be in the form of a direct grant, while roughly $1.5 billion will be a low-interest rate loan, according to a statement on April 15.
"We thank Congress and the administration for quickly passing legislation to protect the paychecks of tens of thousands of United Airlines employees," said spokesperson Frank Benenati.
He added that the money will be used for a percentage of "pay and benefits costs through Sept. 30,” while the airline continues to deliver “much-needed medical supplies and travel of healthcare professionals around the globe."
United and United Express typically have 4,900 flights a day to 362 airports across six continents. In 2019, the company flew over 162 million passengers on 1.7 million flights.
With travel demand uncertain for the remainder of the year, United Airlines sent a letter to employees last week, warning them to be prepared for layoffs after Sept. 30.
“The challenge that lies ahead for United is bigger than any we have faced in our proud 94-year history. … We have now essentially redesigned our network to be down 90 percent while complying with the CARES Act and maintaining connectivity among nearly all our domestic destinations,” according to the letter from CEO Oscar Munoz and President Scott Kirby.
Under federal law, airlines must provide refunds to travelers who ask for their money back after an airline cancels a flight. However, travelers who cancel their own tickets amid the crisis are only getting airline credits. Several Democratic senators sent a letter to 11 domestic airlines asking them to give travelers full refunds if cancellations were due to the pandemic.