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United Airlines Slumps After $2.1 Billion Q4 Loss, Cautious Outlook

United Airlines posted a $2.1 billion fourth quarter loss, its fourth in-a-row, and issued a tepid near-term forecast amid a global pandemic that has "changed United Airlines forever', according to CEO Scott Kirby.

United Airlines Holdings Inc.  (UAL) - Get United Airlines Holdings Inc. Report shares slumped lower Thursday after the second-largest U.S. carrier posted a wider-than-expected fourth quarter loss and cautioned that a near-term recovery for the beaten-down industry remains uncertain. 

United said its adjusted loss for the three months ending in December was pegged at $2.1 billion, or $7 per share, as operating revenues plunged 69% from the same period last year to $3.4 billion. 

The carrier's all-in cash burn rate over the fourth quarter worsened to $33 million per day, United said, while forecasting a further 51% fall in current quarter revenues that will leave it with around $19.7 billion in overall liquidity by the end of March, a figure that matches its end 2020 total. 

"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, the truth is that COVID-19 has changed United Airlines forever," said CEO Scott Kirby. "The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that's better, stronger and more profitable than ever. I could not be prouder of – and more grateful to – this team, which is going to lead us there."  

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United Airlines shares were marked 5.5% lower in early trading Wednesday to change hands at $42.70 each, a move that would trim the stock's six-month gain to around 28%.

United's fourth quarter tallies were similar to its smaller rival, Delta Air Lines Inc.  (DAL) - Get Delta Air Lines Inc. Report, which also posted a $2.1 billion fourth quarter loss but said vaccine rollouts and improved travel sector sentiment could swing it back into profit by the second half of the year.

"Unlike Delta, United is choosing not to offer an explicit projection of when it expects to achieve cash flow break-even, other than to say some time in 2021," said Credit Suisse analyst Jose Caiado. "We largely attribute this to the airlines' different approaches to guidance and setting expectations (UAL has taken a more conservative approach with its outlooks) but ultimately expect a similar break-even trajectory for both airlines."

"In anticipation of an eventual demand recovery, however, UAL has resumed heavy maintenance and engine overhauls, investments that are critical to a recovery," he added.