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United Air Stock Slides; Carrier Warns on Profit Amid Covid Surge

United Air has seen 'a deceleration in customer bookings for travel compared to previous estimations.'

United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report shares moved lower Thursday after the carrier said it expects to post third and fourth quarter losses if current trends continue and Delta variant infections hold back passenger bookings in the weeks and months ahead. 

In a Securities and Exchange Commission filing ahead of an industry conference hosted by investment bank Cowen, United Airlines said current quarter revenues to be down by around a third from 2019 levels, thanks in part to what it called a deceleration in customer bookings linked to the recent surged in COVID cases around the country. 

Last spring, United had said that while business travel remains "significantly depressed", it expects to post an adjusted third quarter profit as overall demand improves.

"Prior to the most recent rise in cases, the Company's financial results were on track to meet its guidance for the third quarter of 2021, including achieving adjusted pre-tax income of $82 million in July 2021 and total revenue per available seat mile (TRASM) of up 1% in the month of July 2021 versus July 2019," United Airlines said. 

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"However, consistent with changes in during prior surges of COVID-19 cases, bookings and yield declined, and as a result the Company now expects total revenue for the third quarter of 2021 to be down approximately 33% versus the third quarter of 2019," the carrier added.

United Airlines shares were marked 1.16% lower in pre-market trading Thursday to indicate an opening bell price of $45.00 each following the release of the SEC filing.

The gloomier forecast contrasts sharply with United's plans, unveiled in late June, to buy a total of 270 new planes from both Boeing and Airbus for around $30 billion in the largest single aircraft deal in the carrier's history.

United said the order will help it to introduce more than 500 new planes to its overall fleet over the next three years and will "significantly boost United's total number of mainline daily departures and available seats across the airline's North American network."

Last spring, United had said that while business travel remains "significantly depressed", it expects to post an adjusted third quarter profit as overall demand improves.