United Airlines records £1.69 billion in quarterly loss due to Coronavirus pandemic

As the Coronavirus pandemic brings travel and tourism to a near halt, the global airline industry is faced with an unprecedented financial challenge. In a statement on Monday, United Airlines (NASDAQ: UAL) recorded a massive £1.69 billion quarterly loss (preliminary).

The U.S carrier also highlighted to have submitted an application for a £3.62 billion loan under the United States’ government’s CARES (Coronavirus Air Relief & Economy Security) act to cushion the economic blow from the health crisis. Within the CARES act, the airline is also seeking an additional £4 billion via PSP (payroll support program) as it struggles to survive amidst the pandemic that has pushed the global economy into recession.

PSP makes the U.S airlines liable to keep their employees on payroll until 30^th September. Multiple carriers including United, however, already warn of an expected job cut in October if demand fails to recover.

United Airlines Records £6.43 Billion In Quarterly Revenue

United Airlines is the first of U.S carriers to have highlighted the preliminary impact of the pandemic on its financial performance in the first 3 months of 2020.

The U.S airline posted its quarterly revenue at £6.43 billion in the first quarter that translates to a 17% decline as compared to the same quarter last year. Excluding special charges, United said that its quarterly loss amounted to £800 million (adjusted).

FactSet consensus for United’s net loss in the first quarter was capped at £500 million and a lower £429 million on an adjusted basis. In terms of revenue, experts had anticipated the company to print £6.71 billion in the recent quarter.

According to United Airlines, it has cut its flight schedule by 90% for May and June. Its report on Monday also accentuated a £40 million impairment charge in the first quarter as it wrote down its Azul Linhas Aereas Brasileiras (Brazilian carrier) investment.

United Airlines Signs A Sale-And-Lease Deal With BOC Aviation

In separate news, United Airlines recently signed a sale-and-lease deal with the Bank of China Aviation for 6 Boeing’s 787-9 and 16 of its grounded 737 MAX jets. The delivery for the airliners is scheduled for 2020.

In the morning session, United Airlines climbed 4% in the stock market. The carrier is still roughly 67% down year to date. In 2019, on the contrary, United had recorded an annual gain of around 7%.

At the time of writing, United Airlines is valued at £5.55 billion and has a price to earnings ratio of 2.41.