Fox Business Briefs: United Airlines and its pilots union reach tentative agreements on early retirement and voluntary licenses; According to the Wall Street Journal, at least two companies want to become the new owner of Brooks Brothers after the company recently filed for bankruptcy.
More than 6,000 United Airlines employees have chosen to take a voluntary separation package, which includes flight benefits and continuous payment until November 30, 2020, as the airline took aggressive measures in the second quarter to mitigate the financial impact of the coronavirus pandemic.
“I am grateful for the professionalism and dedication of our United team members who persevered through a challenging and historic period to deliver to our clients,” United CEO Scott Kirby said in a statement. “While this unprecedented crisis has been difficult for our team, we expect United to produce fewer losses and less cash burn in the second quarter than any of our large network competitors.”
United warned its employees earlier this month that 36,000 workers could be laid off because the pandemic has crushed travel demand and the terms of a $ 2.2 billion federal stimulus package to support the airline industry will expire in October.
AVERAGE OCCUPANCY RATE FOR UNITED AIRLINES IS EXPECTED TO LOWER IN JULY
The company reported a net loss of $ 1.6 billion compared to a profit of $ 1.05 billion a year earlier, with total operating income falling 87 percent year-over-year to $ 1.48 billion, compared to $ 11.4 billion. million in 2019. United said its cargo revenue increased 36 percent from a year ago to $ 402 million after the airline added more than 4,800 cargo flights and total operating costs were reduced by 69 percent compared with the second quarter of 2019.
The airline’s cash outlay for the second quarter averaged $ 40 million per day, including $ 3 million in principal payments and compensation expenses. The company forecasts that the average daily cash burn will be approximately $ 25 million in the third quarter, including $ 6 million in principal payments and compensation expenses.
DELTA, SOUTHWEST DRAWS STRONG DEMAND FOR EARLY DEPARTURE PILOTS
United expects capacity to drop 65 percent in the third quarter compared to 2019, adding that it will continue to “proactively evaluate and cancel flights on a 60-day basis” until demand increases. The company said it expects the lawsuit to stay down until a coronavirus vaccine is available.
The company’s total liquidity as of Monday was approximately $ 15.2 billion, and United predicts third-quarter liquidity to exceed $ 18 billion.
The airline noted that since the start of the pandemic it has raised $ 16.1 billion through debt offers, equity issuance, and aid provided through the CARES Act Payroll Support Program. Additionally, the company raised $ 6.8 billion in guaranteed financing against MileagePlus Holdings in the form of a $ 3.8 billion bond and a $ 3 billion term loan, and raised $ 250 million in a secured line of credit.
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Adjusted capital expenditures for the full year 2020 are expected to be approximately $ 3.7 billion.
| Heart | Security | Latest | Change | Change% |
|---|---|---|---|---|
| UAL | UNITED AIRLINES HLDG. | 33.07 | +0.74 | + 2.29% |
United shares closed at $ 33.07 per share, an increase of more than 2 percent at the end of Tuesday’s trading session, and rose slightly in post-close trading.
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