United Airlines Does Not Know When Demand Will Bounce Back
The United States aviation industry has been showing small hints of recovery this month, with passenger numbers slowly…
The United States aviation industry has been showing small hints of recovery this month, with passenger numbers slowly rising. However, during a virtual conference call yesterday, United Airlines CEO Scott Kirby admitted that even though demand is growing, his company does not know when it will bounce back to pre-COVID-19 levels.
A shift in focus
The priority right now is for the Chicago-based carrier is to get its cash burn down enough to break even and be in an environment where demand is around 50 percent of what it was previously. However, like its counterparts, the airline isn’t sure when this target will be met.
“To be direct about it, no one, including us, knows exactly when demand will bounce back to down 50 percent. But when it does, because of the sacrifices we’ve made, we believe it will mark a critical turning point for United Airlines,” Kirby said during the conference call, which was attended by Simple Flying.
“To not only survive this crisis, but to position the airline for success over the long term, we have to do something that’s really hard for big businesses like ours. We have to be flexible. That includes tough decisions and big sacrifices. But as CEO, no one has a bigger responsibility to take action to mitigate our long-term risk and protect the jobs of the greatest collection of airline professionals in the world at United Airlines.”
There is hope
Nonetheless, the operator is confident in its approach. On Wednesday, it flew around 50,000 passengers, and this is considerable progress from last month. In the middle of April, there were two days in a row where it had less than 10,000 customers. Therefore, there has already been an almost 400 percent increase in demand.
There is still a mountain to climb, but Kirby states that the activity is heading in the right direction, and it appears that the US is opening up. He feels that people are starting to get back out and get back to living.
Time will tell
Altogether, the airline will eventually bounce again. However, with the conditions of the coronavirus outbreak continually changing, it is hard to predict the market’s direction over the next year.
Ultimately, Governments are regularly reviewing their restriction policies, and there are also concerns about a potential second wave of the virus. United can only wait and see how the situation develops. Therefore, it is trying to preserve as much cash as it can to limit the damage.
What are your thoughts on the current climate in the aviation industry? When do you think passenger demand will rise again? Let us know what you think about the market’s prospects in the comment section.