It has been a tough year for the aviation industry because of the coronavirus imposed lockdown. Full-fledged services are yet to resume and this has resulted in huge losses to airlines. One such airline is United Airlines Holdings which has recorded a loss of USD 7.06 billion in the year 2020. The loss is almost double what it earned a year earlier. The net income of Chicago based United in 2019 was USD 3.0089 billion. The entire 2020 was tough for the company as it reported a loss in all four quarters. The fourth-quarter loss of United Airlines was around USD 1.897 billion. However, this came as a reprieve for the airlines as the per day cash burn has come down to USD 19 million per day this time in comparison to USD 24 million per day in the third quarter. The per-day loss for the airline was a whopping USD 38 million in the second quarter.
To cover the loss, the airline has announced that it is looking forward to cutting annual costs by about 2 billion through 2023. This is the company’s plan to recovery which has suffered four straight quarterly losses because of the pandemic. Most airlines are counting on coronavirus vaccines to boost travel demand in 2021. However, airlines are of the view that the strength of a rebound for them will totally depend on the pace at which COVID-19 vaccines will rollout, particularly when cases continue to rise in several parts of the world.
United Airlines had to pay millions in severance and debt payments even though it continued to slash costs. Hit by massive loss, the airline had furloughed thousands of employees last year at the end of the initial round of payroll aid. The company brought back those employees but warned them that the recall could be temporary as the move was initiated after USD 15 billion payroll aid. The company is expecting another support of around USD 2.6 billion through March. It is planning to use the fund to offer some employees options of voluntary leaves. According to officials, this will reduce the number of furloughs and will be in the interest of employees.