United Airlines (United) has released its first-quarter financial results, revealing a greater-than-anticipated loss which the American carrier has attributed to a combination of rising fuel costs and a drop in capacity as airlines struggle to cope with the lack of demand due to the COVID-19 pandemic.
Compared to the previous three months, fuel prices rose by approaching 30% and United expects a further 5% increase over the next quarter. Capacity fell by 54% compared to the first quarter 2019, though this is expected to ease to 45% in the second quarter. The carrier expects its adjusted earnings before interest, taxes, depreciation, and amortization to turn positive later in 2021 despite business and long-haul international demand projected to remain at 70% below 2019 levels. United posted first-quarter total operating revenue of US$3.2 billion, down 66% versus first-quarter 2019 and an adjusted net loss of US$2.4 billion.
In a bid to improve profitability, United will be adding flights to Iceland, Croatia, and Greece which have reopened their borders to vaccinated travelers. It also expects to be profitable on a net basis once long-haul and business demand reaches 35% below 2019 figures and has forecast its second-quarter total unit revenue to fall 20% compared with Q2 2019. This would be below the 27% drop for the first quarter, while United also expects core cash flow to remain positive for the rest of 2021, having turned positive in March.
