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United eyes return to profitability after $1.3b loss

written by Isabella Richards | July 22, 2021
United Airlines Boeing 767 (Wikimedia)

United Airlines has released its second-quarter financial results, reaching a ‘turning point’ as chief executive Scott Kirby expects to be profitable by next quarter.

The airline reported a US$1.3 billion net loss in Q2 2021, a sizeable improvement over its first quarter net loss of US$2.4 billion.

Despite its overall financial results sitting 52 per cent lower than 2019 levels, the Chicago-based carrier saw US$5.5 billion in revenue in the second quarter, up from US$3.2 billion in the first quarter, largely off the back of improving consumer confidence in air travel.

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“Thanks to the professionalism and perseverance of the United employees who have worked so hard to take care of our customers through the pandemic, our airline has reached a meaningful turning point: we’re expecting to be back to making a profit once again,” said Kirby.

The company will now focus on its United Next strategy, he added, and transforming the onboard customer experience.

As travel demandheightens in the US, the airline was able to introduce seven new domestic routes and three new international routes.

United resumed nonstop services on 33 domestic routes and 14 international routes compared to the first quarter, and plans to operate 80 per cent of its full schedule in July.

The airline also expects its third quarter capacity will only be down roughly 26 per cent compared with 2019, snowballing 39 per cent quarter over quarter.

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On an investor call according to Reuters, Kirby said he believes as more people get vaccinated, demand will continue to flourish.

“There’s going to be ups and downs between now and the time that enough of the world is vaccinated that this [pandemic] really proceeds into the background, which we look forward to,” he said.

“We think the most likely outcome is that the continued recovery in demand continues largely unabated … because the evidence is overwhelming that someone who’s vaccinated is highly protected against severe disease, hospitalisation and death.”

According to the latest data, 49.2 per cent of the US population is vaccinated, with 338 million doses distributed.

The US is third in the race to reach a fully vaccinated country, following China at the top and India close behind.

Yesterday, Aeromexico announced its revenue rising nearly 50 per cent from the first few months of the year to US$49.9 million.

Competitor American Airlines has not reported its second-quarter financial results yet, but forecasts positive cash flow.

Southwest Airlines will release its second-quarter financial results today.

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