United Airlines reports COVID induced loss of $7.1 Billion in 2020, hopes to bounce back

United Airlines, on January 20, reported that it took a hefty loss in 2020 due to pandemic induced ban on air travel, however it was eyeing a partial recovery in 2021. The privately run airlines incurred a total loss of $7.1 billion in 2020 which was way higher than the profits of $3.0 billion earned in 2019. However, with the advent of vaccines and improved safety conditions, the airline is expecting 2021 to be a “transition year”

Revenues fell by 64.5 per cent

In its latest annual report, the US-based airlines highlighted that its overall revenues fell by 64.5 per cent to $15.4 billion in 2020. It said that its profits were nixed maximum in March when the WHO declared the coronavirus as a pandemic and pushed all international travel to a halt. However, it gained a bit of momentum later in the year as more and more countries established air bubbles. Now with COVID-19 vaccines becoming available more commonly, the airlines aim to exceed its pre-pandemic profits by 2023.

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Read: United Airlines Posts $1.9 Billion Loss In Pandemic-laden 4Q

Speaking to press reporters, company’s Chief executive Scott Kirby said its response to the crisis was effective in repositioning the company for the long haul, pledging that United would emerge from the downturn "better, stronger and more profitable than ever." In addendum, he also estimated the company’s cash burn at $33 million per day, which was up from $25 million lost per day in the second quarter. The company had suffered a $1.9 billion quarterly loss for the final three months of 2020, compared with profits of $641 million in the 2019 period.

Read: United Airlines Posts $1.9 Billion Loss In Pandemic-laden 4Q

While United Airlines hopes for a recovery, the UN Aviation agency predicted “prolonged depressed demand” for air travel and more financial troubles for airlines as they continue to struggle with the pandemic induced recession. As per the International Civil Aviation Organization(ICAO), airlines in 2020 faced a 60 per cent plunge in demand for air travel and it is set to continue in the near term. The initial air travel drop was reported in January but became widespread after the WHO declared coronavirus a pandemic prompting nations to shut down borders. 

Read: UN Agency Predicts 'prolonged Depressed Demand' For Air Travel In 2021 Amid COVID-19