United Airlines boss says business won't return to normal until 2024
Passenger levels are down 71 per cent on 2019
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Your support makes all the difference.The CEO of United Airlines says that air travel will not return to “normal” until around 2024.
Speaking on an earnings call, Scott Kirby said that he expects demand for flights to remain lower and “is not going to get anywhere close to normal until there’s a widely available vaccine”.
He did say that the worst appears to be over for the airline industry, telling CNBC’s Squawk Box: “We think we’ve turned the corner and can see it”, but a recovery is still “a long way off”.
Mr Kirby estimated that might come by the end of 2021.
CNBC host Carl Quintanilla followed up an initial tweet about the return in demand by saying that it was “a shocking forecast — but Wall Street saw this coming long ago”.
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He quoted Cowen Research saying in April that with stay-at-home order going “into June, July or possibly even as long as August. ... we do not anticipate a robust recovery for airlines. Even after people believe it is safe to travel, we do not anticipate we will see robust travel for at least three to five years.”
The Chicago-based carrier reported a loss of $1.8bn in the third quarter of 2020. Rival Delta Air Lines lost $5.4bn over the same period. Southwest and American Airlines report their results next week.
All airlines have been forced to slash costs, cut routes, and park aircraft in response to the coronavirus.
At the beginning of October, a federal payroll support package for airlines expired and United began furloughing 13,000 workers.
United shares began the year trading at approximately $88, hit a low of $20 in mid-May, and are now trading at around the $34 mark.
While the number of passengers returning to the skies has risen in recent months, it is still a fraction of the levels seen prior to the onset of the global pandemic.
In the third quarter, the Transportation Security Administration recorded a 71 per cent decline in passengers, having screened 64 million people in that period, compared to 220 million in 2019.
At the low point for air travel in April, in one day only 87,500 people were screened — numbers not seen since the 1950s, with the exception on the nationwide ground stop implemented after 9/11.
Those flying largely consisted of essential workers and medical personnel deploying to virus hot zones at the time such as New York, Detroit, and New Orleans.
Mr Kirby took over as CEO of United Airlines in May 2020 following the departure of Oscar Munoz. His appointment was announced the previous December.
He previously served as president of the airline from August 2016, having joined from rival American Airlines.
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