By
Steve Muchoki
April 19th, 2023
In 2021, United Airlines is going to focus on preparing for a recovery. It targets to fully get back to normal by 2023.
United Airlines Holdings Inc (NASDAQ: UAL) has released its Q4 2020 and full 2020 financial report. As a result of the challenges caused by the coronavirus pandemic, United Airlines suffered a huge Q4 loss. As the company has stated, it “manages the most disruptive crisis in aviation history”, however, it is doing its best to stay strong and continues its effort to “lead the industry”.
United Airlines Q4 and Full 2020 Performance: Highlights
For the fourth quarter of 2020, the company’s total net loss made up $1.9 billion, adjusted net loss totaled $2.1 billion. For the full 2020, these figures totaled $7.1 billion and $7.7 billion respectively. Notably, according to FactSet analysts, United Airlines Q4 loss was the largest since 2005. Besides, the company reported total operating revenue of $3.4 billion, down 69% from fourth-quarter 2019, in line with forecasts.
Further, reported fourth-quarter operating expenses were 45% down in comparison with Q4 2019. As for Q4 daily cash burn, it made up $23 million, plus $10 million of average debt principal payments and severance payments per day. The reported fourth-quarter core cash burn was $19 million per day, an improvement of an average of $5 million per day versus Q3 2020.
United Airlines highlighted the negative impact the COVID-19 pandemic has had on its business. However, there has been a bright spot during the hard times. In particular, its cargo business prospered, with its revenue jumping 77% in the quarter to $560 million. That unit contributed 16% of United Airlines’s Q4 revenue, up from just 3% a year earlier.
United Airlines CEO Scott Kirby said:
“Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, the truth is that COVID-19 has changed United Airlines forever. The passion, teamwork, and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that’s better, stronger, and more profitable than ever. I could not be prouder of – and more grateful to – this team, which is going to lead us there.”
In 2021, United Airlines is going to focus on preparing for a recovery. It targets to fully get back to normal by 2023. By that time, the company expects “the combination of structural cost reduction and timely investments to help exceed its 2019 adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin”.
UAL Stock Performance
As a result of the Q4 report, United Airlines stock plunged. It closed 0.96% up on Wednesday, at $45.18 per share, but dropped by 2.70% after hours to $43.96. United Airlines’ market cap is $13.1 billion.
One-year change for UAL stock is negative 47.34%. Hopefully, the company will recover and the stock will see a correlation in the nearest future.