United Airlines (UAL) - Get Report said Thursday that the recent uptick in U.S. coronavirus infections has lead to increased flight cancellations, and cautioned that current quarter capacity will be significantly lower than last year.
United noted in a Securities and Exchange Commission filing that cancellations have been rising into the week of November 18, echoing the record increase in COVID infection rates across the country, and warned that it does not expect a 'linear' recovery over the coming months.
Fourth quarter capacity, the carrier said, is likely to fall 55% from last year, a figure that largely matches the guidance it offered investors following its third quarter earnings last month. United had told investors on November 9, however, that it would add more than 1,400 domestic flights over the week of Thanksgiving, and that it expected to fly 48% of its overall schedule over the month of December.
"At this time, (United Airlines) continues to expect total revenue to be down by approximately 67% in the fourth quarter of 2020 as compared to the fourth quarter of 2019," the carrier said. "The Company continues to expect average daily cash burn during the fourth quarter of 2020 to be approximately $15 million to $20 million, plus $10 million of average debt principal payments and severance payments per day."
United Airlines shares were marked 0.1% higher in pre-market trading following the SEC filing, but pared earlier gains to indicate an opening bell price of $41.10 each.
Last month, United posted a wider-than-expected third quarter loss of $1.8 billion that triggered thousands of job cuts millions in severance payments
The International Air Transport Association predicts full-year global airline traffic will be 66% lower than 2019 levels, following what it called 'hugely depressed' levels in August and September that were impacted by new travel restrictions linked to the resurgence of coronavirus infections in Europe and North America.