UAL Q2 2020 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q2 2020 Earnings Call
• Date: July 22, 2020 at 2:30 PM UTC
• Management Team:
  • Scott Kirby (Chief Executive Officer)
  • Brett Hart (President)
  • Adrian Sella (Executive Vice President and Chief Commercial Officer)
  • Jerry Laderman (Executive Vice President and Chief Financial Officer)
  • Christina Nudo (Director of Investor Relations)

Call Summary

Financial Performance

• United reported a pre-tax loss of $2B for Q2 2020 and an adjusted pre-tax loss of $3.2B for the same period.
• Total revenue in Q2 was down 87% versus the comparable period, while consolidated capacity was down 88% in the quarter.
• Domestic PRASM was down 47% in Q2, and domestic PRASM in June improved to be down 15% year over year.
• International ASMs were down 92% in Q2 compared to the prior comparable period.
• Cargo revenue improved by over 36% in Q2 versus the comparable period, driven by over 3,800 all-cargo charter flights in the quarter.
• Average daily cash burn in Q2 was reduced to $40M, including approximately $3M of principal payments and severance expenses.

Guidance

• United expects third quarter passenger revenue to fall approximately 83% and consolidated capacity to be down approximately 65% for the quarter.
• Domestic third quarter capacity is expected to be down at least 55% versus the comparable period.
• Average daily cash burn is expected to be approximately $25M in the third quarter, including $6M of debt principal payments and severance expenses.
• The company is targeting over $18B of available liquidity by the end of the third quarter.
• The firm now expects 2020 adjusted capital expenditures to be approximately $3.7B, down from prior guidance of less than $4.5B and well below the original $7B forecast.
• United expects to have the most conservative third-quarter capacity deployment among network carriers given current demand and the end of the payroll support program.