United Airlines executives took an upbeat, though measured, tone Thursday, even while reporting net losses of $1.84 billion during the third quarter.
"We can see the recovery on the horizon, and our attention can now be firmly focused there," CEO Scott Kirby said during the company's third-quarter earnings call.
The carrier doesn't anticipate a fast recovery. In fact, its projections remain pessimistic. Chief commercial officer Andrew Nocella said United expects demand, which right now is off approximately two-thirds from last year, to plateau at 50% of 2019 levels until a vaccine is widely available -- likely a year from now.
As a result, United plans to continue flying just 45% of its 2019 levels into early next year -- a more conservative approach than most of its mainline U.S. counterparts.
But Kirby said that United has now taken the necessary steps to be confident that it will survive the pandemic. Operating expenses were down 58.6% during the third quarter. The carrier has raised $22 billion through loans, stock offerings and Cares Act support since March, leaving it with $19.4 billion in liquidity as of the end of September. And United brought cash burn during the third quarter down to $25 million per day from $40 million per day in quarter two. The carrier anticipates it will have at least $16 billion in liquidity at year's end.
"We believe United has had the lowest cash burn throughout the crisis so far among network airlines, and we expect we will be the first network carrier to return to cash positive," Kirby said.
United has also taken dramatic steps to right-size the airline, including furloughing 13,000 employees on Oct. 1, obtaining concessions from labor unions and entering into voluntary separation, retirement and extended leave packages with approximately 9,000 employees.
While cash burn remains an important metric for the carrier as it continues to wade through the pandemic, Kirby noted that United has also begun spending money on initiatives that will position it for strength once travel is again strong. Notably, in August, United resumed retrofitting its Boeing 787 interiors with Polaris business class and premium economy cabins.
For the third quarter, United reported revenue of $2.49 billion, down 78.1% year over year. The figure missed analyst expectations by $50 million, according to the investment website Seeking Alpha. The drop came as United flew 70.4% less capacity than the third quarter of last year.
Load factor for the quarter was 47.8%, a plunge of 38.3 percentage points year over year.
United stock was down more than 4.3% in early afternoon trading.