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United Airlines’ Net Bookings Drop by 70%

United Airlines’ Net Bookings Drop by 70%
Taylor Rains

We knew the coronavirus was severely affecting the airline industry, but it was hard to pinpoint precisely how bad things had gotten. CEO Gary Kelly recently explained the crisis as “a 9/11 like feel,” and JetBlue CEO Robin Hayes suggested the dip in travel demand is possibly worse than what was experienced after the 2001 attacks. To add to the growing concern, United President Scott Kirby just revealed some interesting data on the airline’s domestic bookings.

Net Bookings Drop by 70%

United has disclosed some shocking data about travel demand. Here’s what we know:

  • Domestic net bookings have dropped 70% (new bookings minus canceled bookings)
  • International net bookings to Asia and Europe are down 100% (new bookings minus canceled bookings)
  • Gross (new) domestic bookings are down 25%
  • Revenue for April and May is expected to drop by 70%, while a 60% drop is expected in June.

Kirby explained that although the airline is experiencing a 70% drop in net bookings, the 25% drop in gross (new) bookings was a better indicator of the demand for travel. He said at the J.P. Morgan Industrials Conference, “While those numbers are encouraging compared to international, we’re planning for the public concern about the virus to get worse before it gets better.”

Airline Survivability

Kirby’s data is concerning, and one has to wonder how much longer airlines will be able to operate. As suggested by both Southwest and JetBlue CEOs, the impact of the coronavirus may be worse than that of the 9/11 terrorist attacks. The demand for travel has plummeted, and airlines with weak balance sheets will likely suffer the worst. However, Kirby believes that carriers with stronger balance sheets and other sources of revenue, such as co-branded credit cards, will weather the crisis.

What do you think about the 70% drop in net bookings? Let us know in the comments!

View Comments (6)

6 Comments

  1. bostontraveler

    March 11, 2020 at 2:18 pm

    would be great to just know the individual numbers… confusing way of stating the data.

  2. BayAreaTrvler

    March 11, 2020 at 11:05 pm

    This is probably asking too much, but perhaps the air carriers might possibly recognize and value more greatly their most frequent fliers looking ahead. If and when people start booking again, it will be us.

  3. jjmoore

    March 12, 2020 at 4:31 am

    I think we are lucky to have these numbers at all, regardless of how vague they are. They make sense to me, but the question I really have is: how long can UA sustain this type of travel market before becoming insolvent? This year is a year of reckoning for airlines as a whole, especially LCCs and those with already tight balance sheets.

  4. alangore

    alangore

    March 12, 2020 at 1:55 pm

    Make air travel more flexible, and pax will lose their fears of being stuck with tickets they can’t use.

  5. John Darcy

    March 13, 2020 at 9:34 pm

    Scheduled to fly SYD-SFO on May 12 but everything is subject to whatever panic move comes next from governments. However the reported drop in domestic demand makes it hard to understand why the quote for a SFO-BOS flight for May 18 went up by $50 yesterday…

  6. Counsellor

    March 19, 2020 at 8:08 am

    UA (and the rest of the cartel) have made huge profits in the last ten years. If they were wise, they will have saved some of the huge profits as a reserve for foreseeable situations like this, when normal flying is disrupted.

    If they were NOT wise, and simply squandered the profits (in stunts like giving themselves huge bonuses or “buying back” their own shares), I would say they deserve to pay the price for the profligacy. If the taxpayer is asked — yet again — to bail them out, it should be like a bankruptcy proceeding, with shareholder’s equity going to zero and the management replaced.

    We have to make them stop taking the profits and then turning to the taxpayer to reimburse any losses.

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