United Airlines Shares Slide As Furlough Costs, Demand Concerns Weigh

United said it would book a $300 million charge to its second quarter earnings linked to voluntary job exits as it warns that more than 40% of its workforce could be furloughed in October.

United Airlines Holdings Inc.  (UAL) - Get Report shares slipped lower again Friday after the carrier said it would book a $300 million charge linked to layoffs and warned it could furlough nearly half of its entire workforce.

United said it will send furlough notices to some 36,000 staff -- around 45% of its global total -- in the coming weeks, cautioning them that if airline demand doesn't improve, the carrier will be forced to cut staff once terms of its $5 billion government loan agreement, which formed part of the CARES Act earlier this spring, expire on October 1. 

In a separate filing with the Securities and Exchange Commission late Thursday, United said it would book a $300 million charge over its fiscal second quarter, which ended in June, related to voluntary job losses triggered by the global pandemic. At present, United said it's burning through $40 million in cash each day as it struggles to compensate for the coronavirus-triggered collapse in air travel. 

United Airlines shares were marked 1.4% lower in early trading Friday to change hands at $29.64 each, a move that would extend the stock's year-to-date decline to around 66%. 

Delta Air Lines  (DAL) - Get Report shares, which have slumped more than 56% so far this year, were marked 0.8% lower at $25.45 each while American Airlines Group  (AAL) - Get Report was seen 0.9% lower at $11.08 each. 

Last week, the International Air Transport Association, known as IATA, said global air passenger traffic demand fell 91.3% compared to the same period last year, an historic collapse that the industry lobby group says will lead to more losses, and potential airline bankruptcies, in the coming months. 

Collectively, global airlines are likely to lose around $84 billion this year as travel restrictions, a record recession and coronavirus health concerns cripple flight demand, IATA has warned.