Global Economics

Expected Q2 Losses with United Airlines

In following with recent airline industry trends, it’s expected that United Airlines (UAL) will report significant losses for Q2. The earnings report for United Airlines will most likely be released on Wednesday.

United Airlines’ losses should follow the steep Q2 decline that Delta (DAL) reported last week. When Delta released its earnings report for Q2, over $5 billion in losses were shown.

When shutdowns began taking place in March of this year due to the current coronavirus pandemic, the airline industry took a pretty steep hit. There are reports that the airline industry could only report $1.3 billion combined for the entire second quarter; this number would indicate a loss of about 88.4%. Although sales began picking up for the airline industry towards the end of Q2, it isn’t realistically expected to be enough to cover losses.

With COVID-19 infection rates continuing to spike in the majority of the country, many airline industry experts expect the losses to continue. As of today, there are 3.83 million confirmed coronavirus cases in the U.S and over 143,000 deaths.

Third and fourth quarter financial projections for the airline industry are expected to be on an upward trajectory but still display losses. Expert analysis place Q3 at potentially $3.2 billion in profit and Q4 at potentially $5.3 billion.

Aside from United Airlines, airline companies American Airlines (AAL) and Southwest (LUV) are also expected to report second-quarter earnings this week. Both airlines are similarly expected to report losses.

With airlines continuing to be impacted by the current health crisis, investors will most likely continue to closely watch the industry.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.


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