Kirby Shares His View on Airfares and Future Demand
July 24, 2020
In an interview on July 23, 2020, with CNBC, Scott Kirby conjectured that airfares are likely to “slip as the pandemic continues to depress demand for flights”, at least for the short term.
United reported it lost more than $1.6 billion in the three months ended in June (Q2 2020) and highlighted ongoing corporate initiatives to reduce daily cash burn from $40M (Q2 2020) to $25M (Q3 2020). Scott emphasized his view, “The most important metric is cash burn.”
The pandemic and travel restrictions put in place to retard the spread of the Coronavirus have, in some cases, almost obliterated demand for air travel. While United has cautiously added flights back to the summer schedule, depending on future travel demand, capacity could be reduced even more.
Until there is a vaccine widely available for COVID-19, Kirby expressed a conservative view that revenue could plateau in the area of 50% of 2019 levels.
When asked to share his view on the need for more federal aid, Kirby said: “I’m confident we can get through the crisis without any more funding, but it’s also going to have an impact on employment.”