GPC: Bleeding out

GRIDPOINT CONSULTING‘s Robert Boyle writes:

The bloodbath that is today’s pandemic stricken airline business was on full display last week as the last of the three big US network carriers reported their Q2 results. Earlier in the month, Delta had kicked off the results season with a rather eye-catching $7 billion headline pre-tax loss.

How did the figures from American and United compare and what do they tell us about how well each is managing the crisis?

Reported losses

On the United Airlines earnings call (rather ill-named as there weren’t any earnings to be seen), CEO Scott Kirby boasted that his team had delivered the best results of all the big three. That is certainly true if you look at the headline losses, with losses before tax of “only” $2 billion in the quarter.

The results of all three carriers were heavily impacted by “special items” (about which more in a moment). Excluding these gives a much more comparable measure of the core airline performance and on that basis the three carriers look much more similar. To be fair to Scott, United still comes out ahead, with losses of $3.1 billion, over a billion better than American.

To read the full post, please click here.