UAL Q3 2020 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q3 2020 Earnings Call
• Date: October 15, 2020 at 2:30 PM UTC
• Management Team:
  • Scott Kirby (Chief Executive Officer)
  • Brett Hart (President)
  • Andrew Nocella (Executive Vice President and Chief Commercial Officer)
  • Jerry Leitman (Executive Vice President and Chief Financial Officer)
  • Cristina Munoz (Director of Investor Relations)

Call Summary

Financial Performance

• United reported a pre-tax loss of $2.3B in Q3 2020 and an adjusted pre-tax loss of $3.0B for the quarter.
• Total revenue performance in Q3 was down 78% year-over-year, in line with the company's expectations for the quarter.
• Third quarter passenger revenue was down 84% year-over-year while system capacity was down 70% year-over-year.
• The company achieved an average daily cash burn target in Q3 of $21M plus $4M of debt and severance payments.
• Operating expenses excluding special charges were reduced by 48% in Q3 versus the comparable prior period.
• United ended Q3 with available liquidity of $19.4B, which includes revolver undrawn capacity and remaining CARES Act loan funds.
• Cargo revenue improved by 50% versus last year, driven by over 3,000 all-cargo charter flights during the quarter.
• United returned nearly 150 mainline and regional aircraft to service since July and has about 450 aircraft temporarily grounded.

Guidance

• The company expects fourth quarter total revenue to be down around 67% year-over-year and passenger revenue to fall by 72% year-over-year.
• Consolidated capacity for Q4 is expected to be down approximately 55% versus Q4 2019.
• United expects average daily cash burn for Q4 to be $15M to $20M plus $10M of severance and debt principal payments.
• Fourth quarter total operating expenses excluding special charges are expected to be down approximately 42% versus Q4 2019.
• The company expects early 2021 capacity to be consistent with December Q4 capacity levels and expects realistic capacity to return United to cash positive ahead of other network competitors.
• United reiterated its prior view that demand recovery is not a straight line and expects demand to plateau at about 50% until an effective vaccine is widely distributed.