United Airlines reported “strong evidence” of pent-up demand for air travel and was positioned to take advantage of a recovery in business and international flights.
The carrier on Monday said it is “already moving” to capitalise on the emergence of demand from countries where vaccinated travellers are welcome, and pointed to newly announced international flights to Greece, Iceland and Croatia, which are subject to government approval.
In a statement accompanying the release of first-quarter earnings, the company said these “opportunistic steps” were helping position it “to return to positive net income even if business and long-haul international demand only returns to about 35 per cent of 2019 levels”.
Scott Kirby, chief executive, said: “We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability. We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it.”
United reported a 60 per cent drop in total revenue to $3.22bn in the first three months of 2021, which was just $38m below the mean forecast among analysts surveyed by Refinitiv. Its reported net loss narrowed to $1.36bn, compared with a loss of $1.7bn a year earlier and Wall Street forecasts for a loss of $1.62bn.
The company said capacity across its network during the first quarter was down 54 per cent compared with the same three-month period in 2019. It has forecast capacity during the current quarter being about 45 per cent lower than the second quarter of 2019. Total revenue per available seat mile, a popular industry metric, is expected to be about 20 per cent lower this quarter compared to two years ago.
United shares were down about 2 per cent in after hours trading.
With an increasing number of Americans receiving vaccines, the number of airline passengers has recovered to around the highest levels since the pandemic crushed air travel a year ago.
United is responding to some of those encouraging trends and said earlier this month it planned to start hiring pilots again in May in an effort to meet growing demand. The airline said last week it would pay back some of the taxpayer money it borrowed during the height of the coronavirus pandemic after it conducted a successful $9bn fundraising across bond and loan markets.