United Airlines

Why Shares Of United Airlines Are Down By 10% Today?

United Airlines Video 20.04.21.

United Airlines Stock Dives As Traders Expected Stronger Outlook

Shares of United Airlines gained strong downside momentum after the company released its quarterly earnings report. The company reported revenue of $3.2 billion and GAAP loss of $4.29 per share, beating analyst estimates on revenue and missing them on earnings.

The company noted that Total Revenue Per Available Seat Mile (TRASM) will be down by 20% in the second quarter of 2021 compared to the second quarter of 2019. United Airlines expects that second quarter 2021 capacity would be down by about 45% compared to the second quarter of 2019.

The company also stated that business and long-haul international demand were down by 70% compared to 2019 levels. It looks that concerns about the recovery of the international demand have put serious pressure on the whole sector today as other airline stocks also found themselves under significant pressure.

What’s Next For United Airlines?

United Airlines stock had a strong start of this year so expectations were high. The market did not expect strong performance in the first quarter of this year, but traders hoped for a solid outlook for the next quarters.

Unfortunately, continued problems with coronavirus around the world have put serious pressure on the recovery of the international travel. Business travel remains under pressure as well as many companies have adapted to new reality by using video conference software.

While the recovery of the domestic segment may be robust thanks to the successful mass vaccination program in the U.S., the company will not be able to get closer to its pre-pandemic peformance without the recovery of the international segment.

In this light, news about coronavirus-related restrictions around the world ahead of the summer season will likely serve as a major catalyst for shares of United Airlines and other airline stocks. If the situation gets better and international travel begins to recover, United Airlines stock will have a good chance to get closer to recent highs.

For a look at all of today’s economic events, check out our economic calendar.