United Airlines Holdings Inc. will reduce its average daily cash burn to US$25 million in the third quarter from US$40 million in the previous three-month period, as the company braces for a choppy recovery from the coronavirus pandemic.
More than 6,000 employees have accepted an offer to leave as the company rushes to cut costs, United said in a statement Tuesday as it reported earnings. Earlier this month, the company warned 36,000 workers that their jobs will be at risk when federal payroll aid expires at the end of September.
Underscoring the crisis, United recorded an adjusted loss of US$2.6 billion for the three months ending June 30, which the carrier described as “the most difficult financial quarter in its 94-year history.” Travel demand collapsed in March and April because of COVID-19, and the U.S. government stepped in with US$25 billion in assistance for airlines.
United is bolstering its cash position and said it would have more than US$18 billion of liquidity entering the last quarter of the year. The Chicago-based company has raised US$16.1 billion since the start of the pandemic, and could borrow another US$4.5 billion from the U.S. government later this year if it requires additional funds.
“This quick and aggressive action has positioned United to both survive the Covid crisis and capitalize on consumer demand when it sustainably returns,” United Chief Executive Officer Scott Kirby said in the statement.
The shares were little changed at US$33.01 after the close of regular trading in New York.
Delta Air Lines Inc. last week reported a record loss in the second quarter. American Airlines Group Inc. and Southwest Airlines Co. report earnings Thursday.
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