United Airlines expects $2.1 billion loss in 1st quarter

United Airlines said Monday it expects to record a pre-tax loss of $2.1 billion in the first quarter from a loss of travel due to the coronavirus and a decline in the value of its investments in Latin America.

Without the special charges, the Chicago-based carrier said its first-quarter loss would be $1 billion on revenue of about $8 billion that was down 17% from the same period last year.

United said it has flown only 20% of its normal schedule in April and will reduce that to 10% for May and June. “The company plans to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand,” it said in a securities filing.

Most of the special charges came from a write-down in the value of its investment in Colombia’s Avianca Holdings, which has not flown since March 24 because of government-ordered shutdowns of its hubs in Colombia and El Salvador.

United also booked declines in its investments in the Brazilian carrier Azul Linhas Aereas Brasileiras and took a $50 million impairment charge on the value of routes in China.

Under the $2.2 trillion federal relief measure for businesses and individuals, United said it will be authorized to get up to $9.5 billion in loans or grants. The airline said the aid will be secured by warrants allowing the Treasury Department to acquire up to 18.8 million shares of United’s stock at $31.50 each.

United has about 247 million outstanding shares. They closed Monday at $27.79, down $1.29 for the day, and have lost about 70% of their value over the last year.