United Airlines expects more cash burn as virus cases spike

0
18
United Airlines passenger jets taxi with New York City as a backdrop

(Reuters) -United Airlines Holdings Inc said on Friday average cash burn in the fourth quarter could jump up to $26 million per day, hurt by travel restrictions following a surge in COVID-19 cases over the last few weeks.

The U.S. airline industry is still losing billions of dollars every month due to weak travel demand, exacerbated by recent coronavirus travel advisories that have discouraged holiday travel.

Delta Air Lines and American Airlines also raised their cash burn expectations earlier this month.

United, which expects fourth-quarter revenue to drop close to 70% from a year earlier, said it now estimates average daily cash burn of about $24 million to $26 million, plus $10 million of average debt principal and severance payments per day in the quarter.

It had previously estimated daily cash burn of $15 million to $20 million.

The airline said it was confident of a recovery in 2021.”Recent positive results in vaccine development and efficacy show an encouraging line of sight to the other side of the pandemic,” United said.

(Reporting by Uday Sampath in Bengaluru; Editing by Anil D’Silva and Shinjini Ganguli)

tagreuters.com2020binary_LYNXMPEGBA1J8-VIEWIMAGE