United Airlines (UAL) has reported a net loss of USD (1.7m) in the first quarter 2020, and an adjusted net loss of USD (639) million, the company said.
The company´s total liquidity as of the close of business on Wednesday, April 29, 2020 was approximately USD 9.6 billion, including USD 2 billion under its undrawn revolving credit facility. The company currently expects daily cash burn to average between USD 40 million and USD 45 million during the second quarter of 2020.
The company took early and aggressive action intended to mitigate the impact of COVID-19 to position the company to bounce back quickly and make United stronger when demand returns.
Actions taken include:
-First US airline to make aggressive capacity reductions.
-Suspended share repurchase program on Feb. 24, 2020, after spread of COVID-19 to Italy and terminated the program on April 24, 2020.
-First US airline to actively raise additional liquidity to manage the crisis. Since early March, the company raised USD 4.0 billion of new liquidity in three secured term loan facilities, new aircraft financings and an equity offering (excludes CARES Act Payroll Support Program funding and any Loan Program loans) as of the close of business April 29, 2020.
-The company entered into an agreement with a subsidiary of BOC Aviation Limited for lease financing of six Boeing 787-9 and 16 Boeing 737 MAX 9 aircraft that are currently subject to purchase agreements between United and The Boeing Company and are scheduled to deliver in 2020, including two Boeing 787-9 aircraft that were delivered in April.
-First US airline to announce chief executive officer and president forgoing 100% of respective base salaries.
-First US airline to announce all other officers of the company will take salary reductions, with every officer base salary reduced by 50%.
-Suspended merit salary increases for management and administrative employees and instituted a hiring freeze.
-Offered voluntary unpaid leaves of absence for US-based employees — with more than 20,000 employees now participating.
-Non-employee directors of the company waived 100% of cash compensation for the second and third quarters of 2020.
-First major US airline to require all flight attendants to wear masks on duty.
-Postponed projects deemed non-critical to operation.
-Slashed spending on vendors and outside contractors.
-Reduced planned full-year adjusted capital expenditures by approximately USD 2.5 billion, bringing expected full-year adjusted capital expenditures to below USD 4.5 billion.3
-Plan to only take delivery of aircraft that have financing in place.
United has entered into an agreement to receive approximately USD 5.0 billion from the US Treasury Department through the Payroll Support Program under the CARES Act in the form of a USD 3.5 billion grant and a USD 1.5 billion 10-year loan which will be used to protect the salaries and benefits of employees through Sept. 30, 2020. In connection with this funding, UAL will issue warrants to purchase approximately 4.6 million shares of UAL common stock to the federal government. The first installment of approximately USD 2.5 billion was received by United on April 21, 2020 and warrants to purchase approximately 2.3 million shares of UAL common stock were issued.
The company submitted an application to the Loan Program under the CARES Act. Under the Loan Program, the company expects to have the ability through Sept. 30, 2020 to borrow up to approximately USD 4.5 billion from the US Treasury Department for a term of up to five years, with any loans issued expected to be senior secured obligations of the company.
Since March 19, United Cargo has operated more than 800 cargo-only flights worldwide, bringing more than 28 million pounds of food and supplies to destinations worldwide.
Operated more than 130 repatriation flights bringing more than 18,500 Americans home who were stranded abroad.
United has donated more than 173,327 pounds of food to food banks, hospitals and other organizations from United´s catering facilities and Polaris lounges.
In 2019, launched Miles on a Mission, which allows members to donate miles to organizations including those that now support COVID-19 efforts.