(Bloomberg) -- United Airlines Holdings Inc. predicted that sales will rebound next summer as vaccines take hold, even as the company echoed rivals in warning that surging coronavirus cases have caused near-term demand to weaken over the past month.
Bookings for the third quarter of 2021, the heart of the airline industry's peak season, will only be 40% below pre-pandemic levels, United said Friday in a regulatory filing. By comparison, the carrier expects a 70% decrease this month and next.
“Recent positive results in vaccine development and efficacy show an encouraging line of sight to the other side of the pandemic,” United said in the filing. “While it will take time for the vaccine to be widely distributed, the company's confidence is even stronger in the recovery and the trajectory of the rebound in 2021 and beyond.”
To get there, however, the Chicago-based airline will have to endure a worsening short-term slump. The increase in Covid-19 cases has caused a “continued deceleration in forward bookings,” United said, and fourth-quarter sales will be down abut 70% from a year earlier.
The company said it would burn $24 million to $26 million in cash each day during the period, plus $10 million in debt payments and severance costs. In the third quarter of this year, the company went through $21 million plus $4 million in debt and severance.
Delta Air Lines Inc. warned last week that it will burn more cash than expected this quarter because of weaker bookings, while American Airlines Group Inc. said its cash consumption would be at the high end of its forecast.
Southwest Airlines Co. Chief Executive Officer Gary Kelly said Thursday that the carrier was bracing for “really rough months” in early 2021.
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