United Airlines is making progress in cutting $2 billion of costs as it prepares for business travel recovery and long-haul international travel demand.
The US carrier, reporting first quarter losses of $2.4 billion, expects capacity for the current three months to June to be 45% below the equivalent period in 2019, an improvement on a decline of 54% in the quarter to March 31.
United achieved a return to positive cash flow in March and is focused on returning to positive ebitda [earnings before interest, taxes, depreciation and amortization] margins even if business and long-haul international demand remain as much as 70% below 2019 levels.
The airline said: “United is already moving to capitalise on emerging pent-up demand for travel to countries where vaccinated travellers are welcome.
“In fact, the company announced new international flying to Greece, Iceland and Croatia, subject to government approval.
“These opportunistic steps help position United to return to positive net income even if business and long-haul international demand only returns to about 35% below 2019 levels.”
Chief executive Scott Krby said: “The United team has now spent a year facing down the most disruptive crisis our industry has ever faced and because of their skill and dedication to our customers, we’re poised to emerge from this pandemic with a future that is brighter than ever.
“We’ve shifted our focus to the next milestone on the horizon and now see a clear path to profitability.
“We’re encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it, which is why we’re as confident as ever that we’ll hit our goal to exceed 2019 adjusted ebitda margins in 2023, if not sooner.”
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