United Airlines reported “strong evidence” of accumulated demand for air travel and was positioned to take advantage of a recovery in business and international flights.
The carrier said on Monday that it was “already moving” to capitalize on demand from countries where vaccinated passengers are welcome, and highlighted recently announced international flights to Greece, Iceland and Croatia, which are subject to government approval.
In a statement accompanying the release of first-quarter earnings, the company said that these “opportunistic steps” help it position it “to return to positive net income even if international and long-term business demand returns to only about 35 % of the levels from 2019 ”.
Scott Kirby, CEO, said: “We have turned our attention to the next stage on the horizon and now we see a clear path to profitability. We are encouraged by the strong evidence of accumulated demand for air travel and our continued ability to easily match it. ”
United reported a 60% drop in total revenue to $ 3.22 billion in the first three months of 2021, which was just $ 38 million below the average forecast among analysts surveyed by Refinitiv. Reported net losses were $ 1.36 billion, compared to $ 1.7 billion a year earlier and Wall Street forecasts a $ 1.62 billion loss.
The company said capacity in its network in the first quarter decreased by 54% compared to the same three-month period in 2019. The forecast for capacity in the current quarter is about 45% lower than in the second quarter of 2019. Total revenue per mile available of seats, a popular value of the industry, is expected to be about 20% lower this quarter compared to two years ago.
United shares fell about 2% when trading after hours.
With an increasing number of Americans receiving vaccines, the number of airline passengers has recovered to the highest levels since the pandemic crushed air travel a year ago.
United is responding to some of these encouraging trends and said earlier this month that it intends to start hiring pilots again in May, in an effort to meet growing demand. The airline said last week it would repay some of the taxpayers’ money it had borrowed during the coronavirus pandemic after a successful $ 9 billion fundraiser in bond and loan markets.