In a report to investors on Thursday, United Airlines said that bookings had taken a severe hit over the past week due to recent spikes of COVID-19. The carrier also saw an uptick in cancellations. United acknowledges that the road to recovery from the crisis will not be linear and that actual flown capacity could materially differ from scheduled capacity.
The first wave of virus infections across the globe hit airlines unprecedently hard. However, the recent surge of COVID-19 cases is also doing its fair amount of harm. Rather than the tentative recovery there were signs of in August and September, carriers are again reducing schedules.
US new daily cases reach an all-time high
In the US, the number of infections has reached new levels over the past few days, hitting over 160,000 new daily cases. This is the highest number since the pandemic began, and the unfolding of a crisis some insisted no one would be talking about beyond election day shows no sign of abating. The regained force of COVID-19 has taken a heavy toll on airline bookings. Cancellations also abound, and there is no telling what the next few months will hold.
United Airlines acknowledges this in a report filed with the Securities and Exchange Commission on Thursday, November 19th. The carrier states that the week ending on Wednesday had seen a “deceleration in system bookings” and an increase of cancellations due to the recent spike in confirmed COVID-19 cases.
“The Company does not currently expect the recovery from COVID-19 to follow a linear path and, as such, the Company’s actual flown capacity may differ materially from its currently scheduled capacity,” United said in the report seen by Simple Flying.
Fourth-quarter at close to 70% less revenue
Furthermore, the carrier said that it expects capacity for the fourth quarter to be down by 55% year-on-year. Moreover, United believes revenue will be 67% lower compared to the same time in 2019. It estimates daily cash burn to be between $15 million to $20 million, with an additional $10 million of average debt principal payments and severance payments per day.
This is a somewhat different tone from the mildly optimistic one United set when it presented its Q3 results in mid-October. The earnings release itself was entitled “As Q3 Ends, United Airlines Shifts from Surviving the COVID-19 Crisis to Positioning to Lead the Rebound.”
Taking the lead on transatlantic testing
Meanwhile, United has taken the lead on transatlantic pre-departure COVID-19 testing. Everyone on flight 14 from New York Newark to London on November 16th had been provided free rapid tests before departure. Could this be the ticket to coaxing travelers back to the skies while the pandemic shows no sign of slowing down and demonstrate to governments that borders can reopen before a vaccine is readily available?
Flight 14, New York/Newark – London: The world’s first transatlantic flight to guarantee everyone (over 2 years old) on board tested negative for COVID-19 before departure.
Learn more: https://t.co/HVWP1kCmic pic.twitter.com/bdZeDaEgQK
— United Airlines (@united) November 17, 2020
What are your thoughts on the US domestic market over the holidays, given the current situation? Let us know your thoughts in the comments.
