US United Airlines Q1 Loss of 2.5 Trillion Won... Largest Since Financial Crisis

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The airline industry, hit hard by a sharp drop in demand due to the spread of the novel coronavirus infection (COVID-19), is set to receive a gloomy first-quarter report card as expected.

According to the Wall Street Journal (WSJ) and others on the 20th (local time), United Airlines, one of the major U.S. airlines, reported a first-quarter loss of $2.1 billion (pre-tax, approximately 2.56 trillion KRW). This is the largest scale since the 2008 global financial crisis.

United Airlines' first-quarter revenue was estimated at $8 billion, a 17% sharp decline compared to the same period last year.

Earlier, United Airlines announced that air travel demand significantly decreased during the last two weeks of March due to the drop in passenger demand caused by COVID-19. Accordingly, the estimated daily revenue loss is expected to reach $100 million.

United Airlines stated that it is expected to continue suffering from a sharp decline in passenger demand in May and June, planning to operate only about 10% of its normal flight schedule.

United Airlines is scheduled to receive approximately $5 billion in support under the Treasury Department's Paycheck Protection Program (PPP) to provide salaries to employees until September 30. In addition, it has applied for a loan of up to $4.5 billion over the next five years from the Treasury Department. If the loan is approved, it must issue warrants to purchase 14.2 million shares (at $31.50 per share) to the U.S. Treasury.

United Airlines has also raised $2.75 billion in funding from financial institutions.

Meanwhile, on the previous day, United Airlines decided to sell and lease back 22 aircraft to BOC Aviation, a global aircraft operating leasing company, to secure cash liquidity.

This content was produced with the assistance of AI translation services.