United Air CEO Says Revenue Will Remain Depressed Until COVID-19 Vaccine Launch

Data from the U.S. Transportation Security Administration shows total passengers moving through airports (including airline workers and airport employees) is down around 73% year-over-year. United Airlines Holdings Inc UAL is seeing its revenue down even more at 83%, CEO Scott Kirby said on CNBC.

What Happened: United expects to see a gradual rebound in revenue trends to down 50% compared to prior to the start of the pandemic, Kirby said. Revenue won't get "anywhere close to normal" until a COVID-19 vaccine is widely distributed to a large part of the population. Only at that point will revenue "quickly" return to pre-pandemic levels.

United expects to have $18 billion in liquidity in the third quarter and the CEO said he's "highly confident" it will be enough to get through the pandemic. But the process of doing so certainly won't be easy as the company already warned 36,000 employees that as a "last resort" some of their jobs could be at risk.

Why It's Important: The simple reality is "none of us know" for sure what a post-COVID flying environment will look like, Kirby said. While video conferencing and other technological advances have made business interactions "good," it's "not nearly as good" as in-person interactions.

"We are social creatures and United is about connecting people and uniting the world," he said.

What's Next: Business travel could see a major uptick as soon as companies realize they're losing accounts to rivals who made their pitch over a dinner meeting. This scenario was part of a 1990 United commercial and could just as well be relevant today.

"A year or two after the pandemic is over we will be back to travel as normal," Kirby said. "But we aren't going to count on that. We are going to have flexibility and see what actually happens."

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