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United Airlines Stock Sinks 57% in a Month: Here's Why
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Shares of United Airlines (UAL - Free Report) have lost 57.2% compared with the industry’s 54.9% decline in the past month.
United Airlines, like most of its peers, has been hit hard by the sharp drop in air-travel demand due to the coronavirus outbreak, which eventually hampered its prospects.
Coronavirus-Caused Agony Arrests United Airlines’ Growth
Due to the coronavirus-induced tanking demand, United Airlines aims to cut international flights by 90% in April. Moreover, this Zacks Rank #3 (Hold) Chicago-based carrier aims to decrease the number of flights across the United States and Canada in excess of 40%. The capacity reductions are expected to extend into the summer travel period.
United Airlines apart, other carriers like Delta Air Lines (DAL - Free Report) , JetBlue Airways (JBLU - Free Report) and American Airlines (AAL - Free Report) trimmed capacity in the face of dwindling demand due to the global health hazard.
In fact, U.S.-based carriers are seeking federal financial assistance to cope with this unprecedented crisis. Management at United Airlines even cautioned against a huge number of layoffs if “sufficient” help is not available from the Fed by Mar 31.
Due to the coronavirus-led weak demand scenario, United Airlines expects March revenues to be down $1.5 billion from the reported figure in March 2019. In fact, the carrier anticipates the number of customers and revenues to decline sharply going forward.
To mitigate the impact of adversities, United Airlines is planning to reduce payroll expenses. To this end, the company will be slashing corporate officers' salaries. Moreover, the airline also adopted measures, such as freezing hiring (except for crucial roles to counteract the demand slump). Additionally, United Airlines withdrew its first-quarter 2020 and full-year projections.
Due to this coronavirus-induced ambiguity, Fitch Ratings downgraded its outlook for United Airlines to negative.
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United Airlines Stock Sinks 57% in a Month: Here's Why
Shares of United Airlines (UAL - Free Report) have lost 57.2% compared with the industry’s 54.9% decline in the past month.
United Airlines, like most of its peers, has been hit hard by the sharp drop in air-travel demand due to the coronavirus outbreak, which eventually hampered its prospects.
Coronavirus-Caused Agony Arrests United Airlines’ Growth
Due to the coronavirus-induced tanking demand, United Airlines aims to cut international flights by 90% in April. Moreover, this Zacks Rank #3 (Hold) Chicago-based carrier aims to decrease the number of flights across the United States and Canada in excess of 40%. The capacity reductions are expected to extend into the summer travel period.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Airlines apart, other carriers like Delta Air Lines (DAL - Free Report) , JetBlue Airways (JBLU - Free Report) and American Airlines (AAL - Free Report) trimmed capacity in the face of dwindling demand due to the global health hazard.
In fact, U.S.-based carriers are seeking federal financial assistance to cope with this unprecedented crisis. Management at United Airlines even cautioned against a huge number of layoffs if “sufficient” help is not available from the Fed by Mar 31.
Due to the coronavirus-led weak demand scenario, United Airlines expects March revenues to be down $1.5 billion from the reported figure in March 2019. In fact, the carrier anticipates the number of customers and revenues to decline sharply going forward.
To mitigate the impact of adversities, United Airlines is planning to reduce payroll expenses. To this end, the company will be slashing corporate officers' salaries. Moreover, the airline also adopted measures, such as freezing hiring (except for crucial roles to counteract the demand slump). Additionally, United Airlines withdrew its first-quarter 2020 and full-year projections.
Due to this coronavirus-induced ambiguity, Fitch Ratings downgraded its outlook for United Airlines to negative.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>