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50% jump in cargo revenue helps United Airlines slow Q3 cash burn

United Airlines (NASDAQ: UAL) cargo revenue shot up 50% in the third quarter to $422 million compared to the same period in 2019, topping the powerful 36% gain it achieved in the previous quarter amid a coronavirus pandemic that has throttled its main passenger business.

The Chicago-based carrier posted an adjusted net loss of $2.4 billion, but said it’s drawing down financial reserves at a lower rate. United’s average daily cash burn was $25 million, which included $4 million of average debt principal payments and severance payments, compared to $40 million in the second quarter with $3 million in finance payments.

United’s second quarter adjusted net loss was $2.6 billion.

United predicted it would outperform its peers again this quarter because of its ability to maintain liquidity, minimize cash burn and reduce overhead.

United’s earnings, released after the market closed, showed the company reduced total operating costs by 59% versus last year’s third quarter, and by 48% when special charges are excluded.

United has operated more than 6,000 dedicated passenger freighters since mid-March to take advantage of high demand from shippers hungry for airlift since thousands of passenger flights were grounded worldwide. The revenue gains are primarily the result of much higher yields since the amount of actual freight transported is below last year’s total. During the third quarter cargo-ton miles fell 14.8% to 685 million.

But with passenger revenues down 84%, the cargo division’s performance is more critical than ever. Cargo revenue as a percentage of total operating revenue was a robust 25.6%, down slightly from 27.3% last quarter. Nonetheless, it’s a huge leap from cargo’s normal contribution of less than 3%.

Cargo revenue for the first nine months grew 26% to $1.1 billion compared to last year.

“Having successfully executed our initial crisis strategy, we’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” said United CEO Scott Kirby. “Even though the negative impact of COVID-19 will persist in the near term, we are now focused on positioning the airline for a strong recovery that will allow United to bring our furloughed employees back to work and emerge as the global leader in aviation.”

Click here for more American Shipper/FreightWaves stories by Eric Kulisch.


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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at