United ex­pects revenue to stall at 50% with­out a virus vac­cine

Air­line suf­fers 89% revenue plunge in sec­ond quar­ter

Chicago Sun-Times - - BUSINESS - BY DAVID KOENIG

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.

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