More than 6,000 United Airlines employees have opted to take a voluntary separation package, including flight benefits and continuous pay through Nov. 30, 2020, as the airline took aggressive action in the second quarter to mitigate the financial impact of the coronavirus pandemic.
"I am grateful for the professionalism and dedication of our United team members who persevered through an historic and challenging period to deliver for our customers," United CEO Scott Kirby said in a statement. "While this unprecedented crisis has been difficult for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors."
United warned its employees earlier this month that 36,000 workers could be furloughed as the pandemic has crushed travel demand and the terms of a $2.2 trillion federal stimulus package to support the airline industry are set to expire in October.
The company reported a net loss of $1.6 billion compared with a profit of $1.05 billion a year earlier, with total operating revenue falling 87 percent year-over-year to $1.48 billion, compared to $11.4 billion in 2019. United said its cargo revenue jumped 36 percent from a year ago to $402 million after the airline added more than 4,800 cargo flights and that total operating costs were reduced by 69 percent compared to the second quarter of 2019.
The airline's cash burn for the second quarter averaged $40 million a day, including $3 million of principal payments and severance expenses. The company is predicting average daily cash burn to be approximately $25 million in the third quarter, including $6 million of principal repayments and severance expenses.
United expects capacity to be down 65 percent in the third quarter compared to 2019 and added that it will continue to "proactively evaluate and cancel flights on a rolling 60-day basis" until demand increases. The company noted that it expects demand to remain suppressed until a coronavirus vaccine is available.
United said its total liquidity as of Monday was approximately $15.2 billion and predicts third-quarter liquidity to be over $18 billion.
The airline noted that since the beginning of the pandemic it has raised $16.1 billion through debt offerings, stock issuances and aid given through the CARES Act Payroll Support Program. In addition, the company raised $6.8 billion in financings secured against MileagePlus Holdings in the form of a $3.8 billion bond and a $3 billion term loan and raised $250 million in a secured term loan facility.
Full-year 2020 adjusted capital expenditures are expected to be approximately $3.7 billion.
United stock closed at $33.07 per share, up more than 2 percent at the end of Tuesday's trading session, and rose slightly in after-hours trading.