United Cites “Rebounding Demand” As Reason for Optimism in Q1 2021 Financial Report

United Cites “Rebounding Demand” As Reason for Optimism in Q1 2021 Financial Report
Joe Cortez

Even though United Airlines reported an adjusted net loss of $2.4 billion in the first three months of 2021, executives for the Chicago-based carrier say there’s plenty of reason to be optimistic. The airline says even if international and business travel demand doesn’t come back immediately, there’s still a path towards positive net income this year.

United Airlines says there’s hope on the other side of the COVID-19 pandemic, even if the carrier posted their fifth-straight quarter of losses. In an update to shareholders, the airline announced a $2.4 billion net loss for the opening months of 2021.

Despite Positive Projections, First Quarter Capacity Down by 54 Percent in First Quarter

While much of the news coming from airlines is focused on the continued demand for air travel by passengers, United’s results painted a much different picture about the reality of 2021’s first three months. The airline noted their total operating revenue of $3.2 billion was only one-third of what they earned over the same time in 2019.

Nonetheless, leaders for the airline say there’s still a path towards profitability in the coming months. While capacity is expected to only be at 55 percent compared to 2019, they believe by adding routes and by capitalizing “on emerging pent-up demand for travel to countries where vaccinated travelers are welcome,” the airline believes they can turn their balance sheet positive. According to the carrier, it’s possible to return to profitability even if business and long-haul international demand only returns to 35 percent of what it was in 2019.

“We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability,” Scott Kirby, chief executive of United, said in a press release. “We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it, which is why we’re as confident as ever that we’ll hit our goal to exceed 2019 adjusted EBITDA margins in 2023, if not sooner.”

United says as demand continues to grow, they will continue to invest in the customer experience. This includes adding the United Polaris cabin to new aircraft, upgrading United Club locations in Newark and Denver, and investing in more digital tools.

United’s Loss Follows Delta’s Dismal Returns

United is the second airline to report a loss in 2021, but possibly not the last. On April 15, 2021, Delta Air Lines reported a first quarter adjusted pre-tax loss of $2.9 billion, on adjusted operating revenue of $3.6 billion.

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1 Comment

  1. FlyingNone

    April 19, 2021 at 9:00 pm

    As the CDC announces today that people should not travel internationally due more Covid-19 increase.

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