United Airlines shares fell 8.5% on Tuesday after airlines reported larger-than-expected first-quarter losses, suggesting that major businesses and international travel will not recover significantly until next year.
United Reported loss of $ 1.36 billion in first quarter After the market closes on Monday. Business and international travel is still down about 80% from pre-pandemic levels.
“It’s unlikely that it will change tomorrow,” CEO Scott Kirby said in a phone call with investors on Tuesday. “They will get better and better as business trips come back and borders resume.”
Kirby predicted that business trips would start picking up in the fall when people returned to office buildings, but in earnest until January, when businesses “returned their business trips to their budgets and aren’t included in this year’s budget.” Will not progress.
Traveling abroad depends on lifting virus-related restrictions, Kirby said. He said that might not happen until next year.
This week, United announced new flights to Greece, Croatia and Iceland. Kirby hopes that restrictions between the United States and the United Kingdom will be relaxed by the summer of vaccinated passengers. Conversely, the State Department said Monday that Americans should reconsider traveling abroad due to the high incidence of COVID-19 in most countries.
Prior to the pandemic, United’s fate relied almost equally on leisure travel, business trips, and international leaflets in the United States. Domestic leisure travel is the only one that is even close to normal levels and currently accounts for most of the airline’s passengers. However, vacationers usually pay lower fares. This is squeezing the earnings of United and other airlines.
Chicago-based United’s first-quarter losses were slightly higher than analysts expected, except for federal salary assistance and other temporary items. However, airlines will make a profit when cash flow turns positive in March and business and long-haul travel returns from the current 20% to 65% of 2019 levels, except for certain costs. I said I would raise it.