A United Airlines plane seen at the gate at Chicago OHare International Airport (ORD) on October 5, 2020 in Chicago, Illinois.
Daniel Slim | AFP | Getty Images
United Airlines‘CEO Scott Kirby said Thursday he expected the demand for air travel to stay lower than normal until there was a widespread coronavirus vaccine, but the worst seems to be over.
United shares fell about 4% in morning trading.
“We think we went around the corner and can see it,” Kirby told CNBC. “Squawk box. “
A recovery is “far away,” said Kirby, adding that demand “will only return anywhere near normal once there is a widely available vaccine”. He estimates that this will be the end of 2021.
The pandemic spoiled what is usually the peak summer season for US airlines. After the market closed on Wednesday, the Chicago-based airline was reported it lost $ 1.8 billion in the third quarter. Delta Airlines Earlier this week reported a Net loss of $ 5.4 billion in the quarter.
Air traffic has increased over the past few months and Kirby has noted the recent improvements. But it’s still only a fraction of the normal value. In the third quarter alone, the Transportation Security Administration screened 64 million people at US airports compared to 220 million last year, a decrease of 71%.
United and other airlines have spent the pandemic raising money to weather the crisis and cut costs, park hundreds of planes and cut routes. The airline had $ 19.4 billion in cash at the end of September. The company has reduced its cash burn from an average of $ 40 million per day in the previous quarter to $ 25 million per day, including debt and severance payments.
Kirby said the airline will see positive cash flow “sometime next year”. Delta announced Tuesday that it is pushing back its goal of eliminating cash burn in early 2021, later than its previous goal for later this year.
Chicago-based United began taking around 13,000 workers on leave earlier this month after terms expired on a $ 25 billion airline payroll support package that banned job cuts.