United Airlines expects 2021 to be a year of transition after reporting annual losses of more than $7 billion.
The carrier is continuing efforts to lead the industry “as it manages the most disruptive crisis in aviation history”.
The US airline giant expects its earnings [ebitda] margin to exceed 2019 pre-pandemic levels by 2023 due to cost cuts and financial aid.
Ongoing recovery planning could help ensure United is equipped to reach this level sooner if demand returns more quickly, according to the carrier.
But in the short-term, United expects operating revenue in the first quarter of the year to be down by as much as 70% over the same period in 2019, with capacity cut by at least 51%.
“Accelerated distribution of the Covid-19 vaccine may lead to faster improvement, however, the company is not including this potential improvement in its first quarter 2021 revenue outlook,” United said while noting that it ending 2020 with liquidity of around $19.7 billion.
United raised more $26 billion since the start of the crisis and made “important progress” in reducing core cash burn to ensure the company’s survival. Staff numbers have been cut by 22% from 96,000 to under 75,000.
A total of $1.4 billion of annual cost savings have been identified over the past three quarters and it plans to achieve at least $2 billion in “structural reductions” moving forward.
“Having stabilised its financial foundation, the company expects 2021 to be a transition year that’s focused on preparing for a recovery,” the airline added.
“United has resumed heavy maintenance and engine overhauls, investments that are essential to recovery when demand returns.”
Chief executive Scott Kirby said: “Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making.
“But, the truth is that Covid-19 has changed United Airlines forever.
“The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that’s better, stronger and more profitable than ever.”