Market News

United Airlines Defers Plane Deliveries To Beyond 2022 As Air Travel Remains Muted

United20revenue 0

United Airlines Defers Plane Deliveries To Beyond 2022 As Air Travel Remains Muted

Tyler Durden

Wed, 07/22/2020 – 12:50

United Airlines Holdings Inc. said Wednesday morning, all new aircraft deliveries due in 2022 have been deferred as air travel for the next several years will remain depressed. The Chicago-based company also said 32,000 employees have volunteered for a temporary leave of absence.

Earlier in the morning, United Airlines’ CEO Scott Kirby told CNBC that estimated sales would not recover in a V-shaped formation until there’s a proven vaccine for COVID-19. 

“Our guess is that revenue will get to about 50% of what it was in 2019 in a pre-vaccine world,” Kirby told CNBC. Once we get past a vaccine and it is widely distributed, we will quickly recover towards 100%, but our guess is we are going to plateau at 50% until we get to a vaccine.”

On Tuesday, the airliner reported revenues of $1.48 billion in 2Q20, an 87% crash from $11.4 billion during the same time last year. It said capacity in 3Q would be down 65% compared with the same quarter a year ago.

<!–[if IE 9]><![endif]–>

In early July, United Airlines warned 36,000 employees were at risk of losing their jobs in October when the federal payroll stimulus expires. 

Shares of United Airlines slid nearly -2% on Wednesday. 

<!–[if IE 9]><![endif]–>

On Monday, the Transportation Security Administration (TSA) published new passenger data from US airports, showing the first slump in weekly air travel since April. 

<!–[if IE 9]><![endif]–>

h/t CNBC 

United Airlines’ deferment of planes due in 2022 suggests the travel and tourism industry will remain muted for a couple of years. It also implies there’s no V-shaped recovery in the economy this year


Follow us:
Visited 8 times