United expects revenue to stall at 50% without a virus vaccine
Airline suffers 89% revenue plunge in second quarter
United Airlines executives said Wednesday that travel will rise when the number of new coronavirus cases drops but the airline’s revenue will stall around 50% of prepandemic levels until there is a vaccine.
No doubt United would settle for half of normal sales right now. Its revenue plunged 89% in the second quarter, pushing the Chicago company to a $1.6 billion loss.
Air travel was slowly recovering until the number of confirmed coronavirus cases in the U.S. surged, especially in the Sun Belt, starting around late June. New York, New Jersey and Connecticut now require visitors from 31 states to quarantine themselves for 14 days upon arrival, and other states have similar edicts.
About 530,000 people went through U.S. airport security checkpoints on Tuesday, the lowest number in July other than the Independence Day holiday, and down 78% from a year ago.
United executives said the setback will be only temporary.
“We do expect that demand recovery, which stalled in recent weeks, will begin to recover again when new cases start to fall, quarantines are lifted, and borders are reopened,” Andrew Nocella, the airline’s chief commercial officer, said Wednesday on a call with analysts and reporters.
Nocella said United’s revenue will rise to 50% of normal “over time” and stay there until there is a vaccine for COVID-19, the disease produced by the coronavirus.
United and other airlines are trying to persuade consumers that air travel is safe. CEO Scott Kirby said that filtration systems and air-flow patterns inside planes make them safer than restaurants, office buildings, “or even a hospital.”
A traveler walks through O’Hare in June.