Air travel demand is unlikely to surpass half of its normal
levels as long as the Covid-19 crisis persists, United Airlines executives said
during an earnings call on Wednesday.
United's second-quarter operating revenue was down 87.1 per cent
year over year to US$1.5 billion, including a 93.5 per cent decline in
passenger revenue. Corporate traffic in June was down 96 per cent year over
year, EVP and chief commercial officer Andrew Nocella said.
While demand had begun to pick up in June, recent increases
in Covid-19 cases across the United States derailed recovery, executives said.
United recently lowered its planned schedule for August and still is finalising
its September schedule, and load factors, which were averaging 57 per cent in
June, will likely be below 50 per cent in the coming weeks, Nocella said.
Although Nocella said demand recovery likely would start up
again when Covid-19 cases begin to decline and quarantine restrictions are
lifted, but it would be "jagged."
"We continue to believe a full recovery is contingent
upon effective therapeutics and a vaccine," Nocella said. "Our best
guess is demand, as measured by revenue, will recover over time to be down
approximately 50 per cent [year over year] and then plateau at that level until
a vaccine is widely distributed."
The carrier is working with its unions to develop voluntary
programmes to mitigate looming furloughs after 1 October, United president
Brett Hart said. United is about to close its previously announced voluntary
separation and retirement programmes, in which more than 6,000 employees have
opted in so far, he said.
"Unfortunately, this crisis has lasted longer and
become worse than most experts anticipated," Hart said. "So, these
efforts, while meaningful and appreciated, simply are not enough and only get
us a small step of the way there, leaving us to make some of the most difficult
decisions in the history of United Airlines, specifically on the size of our
workforce."
United reported a loss of $1.6 billion for the second
quarter, compared with net income of $1.1 billion in the second quarter of
2019.