A United Airlines plane seen at the gate of Chicago OHare International Airport (ORD) on October 5, 2020 in Chicago, Illinois.
Daniel Slim | AFP | Getty Images
Shares of United Airlines fell more than 9 percent on Tuesday morning after the carrier reported its fifth consecutive quarterly loss and its CEO expressed uncertainty about when two key parts of the business would will recover from the coronavirus pandemic.
CEO Scott Kirby said the demand for international and corporate long-distance travel fell by about 80% from 2019 levels, depriving the carrier of the high-paying customers it had relied on before the crisis.
“The big question is when are these two things coming back and we’re not sure when this is going to happen,” Kirby said in an interview with CNBC’s “Squawk Box.” He said both segments are likely to begin to recover in the summer and second half of the year.
The airline reported a $ 1.4 billion loss in the first quarter on Monday and said it could reach profitability even if demand for international and long-distance business travel returns to 35% of 2019 levels.
United on Monday announced new flights to countries that have begun opening their borders, such as Greece, Iceland and Croatia, and Kirby said the airline made strong reservations for those flights after they went on sale.
However, the State Department recommends travelers to reconsider travel abroad. On Monday, he said he would increase “no travel” permits to 80 percent of the world’s countries, citing the Covid-19 pandemic as an “unprecedented risk to travelers.”
Domestic leisure travel reservations to popular holiday destinations, such as beaches, have exceeded 2019 levels, Kirby said.
Holidays flying in the US have led to a recovery in travel as more people become vaccinated, governments loosen travel restrictions and tourist attractions reopen. But companies have not yet put many of their employees on the road, and international travel bans or quarantine requirements continue to keep many travelers closer to home.
“I don’t know how people find hotels,” Kirby said of popular holiday destinations.