United Airlines sees positive uptick in flight searches, but only for travel next year

May 1, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

United Airlines does not sugar coat pandemic reality. The travel industry has hit bottom and there are few, if any, signs that people are ready to fly again.

New bookings for the Chicago-based carrier are at “net zero” — or bookings minus cancellations — with no near-term sign of improvement, United president Scott Kirby said during a first quarter earnings call Friday. The airline has responded by slashing schedules by 90% through June.

“The real issue for us about demand is going to be that people feel safe and have some reason to travel,” he said, noting that guaranteeing clean planes alone will not get people back in the air. “Disney World needs to be open… Cafes and museums in Paris need to be open before people go back, and conventions need to be open and running.”

Get Coronavirus travel updates. Stay on top of industry impacts, flight cancellations, and more.

Few Americans are traveling. The latest Transportation Security Administration (TSA) screening data shows just 154,695 people passed through airport checkpoints on April 30, just 6% of the number a year ago. The number of screenings is up slightly from a low of 87,534 on April 14.

In addition, more than 3,000 planes flown by U.S. carriers are idled having not flown during the week ending April 28, according to data from the trade organization Airlines for America (A4A).

Airlines are accelerating aircraft retirement plans to cut costs amid near-zero demand. American Airlines has removed five types from its fleet — Airbus A330-300s, Boeing 757s and 767s, Bombardier CRJ200s and Embraer E190s — and Delta Air Lines will remove its McDonnell Douglas MD-88s and MD-90s in June.

United, for its part, does not yet have plans to retire any of its more than 800 jets. To date, it has only “temporarily parked” aircraft pending a better view of the recovery before any decisions are made, the airline’s chief financial officer Gerry Laderman said on Friday.

Related: Delta says goodbye to the last ‘Mad Dogs’ flying in the US amid coronavirus retirements

United did leave analysts with at least one seed of optimism. The airline is seeing more searches on its website for travel in the spring of 2021 than it did last year for travel this spring, Kirby said.

But a 2021 recovery is a long, long way off. And next year is well after the air service and staffing protections of the government’s coronavirus aid package, the CARES Act, expire on Sept. 30.

‘We are planning for the environment to possibly continue at essentially net zero passenger revenues for the rest of the year and into 2021,” said Kirby. “We aren’t projecting that, and certainly hope it’s better than that, but we are planning for the possibility.”

United is prepared to make difficult strategic decisions based on what it sees over the next few months. These could include involuntary furloughs or layoffs of staff, or even closing one of its eight hubs.

Related: US carriers signal slow recovery with United planning to cut June flying by 90%

The carrier reported a $1.7 billion net loss — its first since 2014 — in the first quarter. It aims to reduce its daily cash loss to $40 to $45 million by the end of June.

Cowen analyst Helane Becker said in a report Friday that United’s daily loss projections are a result of the airline’s quick response to the COVID-19 crisis. United was the first U.S. carrier to cut domestic capacity in early March.

Both American and Delta aim to get their daily loss, or how fast they are going through the cash in their bank accounts, to around $50 million a day by June.

Related: It may be years until passenger demand returns to 2019 levels for US airlines

Featured image by Michael Ciaglo/Getty Images.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.