WOW: United Airlines Domestic Net Bookings Down 70%

Filed Under: United

Obviously demand for air travel has decreased greatly recently, as fears surrounding coronavirus have continued to grow.

Several days ago Southwest CEO Gary Kelly said that the drop-off in domestic travel demand “has a 9/11 like feel.” Southwest would know, because they’re 97% domestic.

We’ve seen airlines across the world introduce travel waivers and cut capacity significantly. Just how bad are things for other airlines in the domestic market, though?

Today United Airlines President Scott Kirby has revealed just how much demand has dropped in recent days:

  • Domestically net bookings are down about 70% (which is calculated as new bookings minus canceled bookings)
  • Domestically gross bookings are down about 25% (new bookings)
  • Net bookings to Asia and Europe are down 100% (again, calculated as new bookings minus canceled bookings)
  • Revenue is expecting to be down 70% in April, and also down significantly in subsequent months

That’s massive, and frankly even worse than I was expecting the situation to be.

My goodness, one has to wonder for how long airlines will be able to weather this. If this is how much demand is down in the US, I can only imagine how much demand is down in some other parts of the world.

While I suspect most US airlines will be able to weather this in one way or another, one has to wonder how much longer some of the more financially “fragile” airlines will remain in business with the current situation…

What do you make of the 70% drop in net domestic bookings domestically for United — is that higher or lower than what you were expecting?

  1. I am curious how steep the drop-off was after they put in that ridiculous schedule change rules into place.

  2. Just boarded a UA 772 at SFO…the plane probably has less people than a 738. My coworker was offered an upgrade into Polaris for $185, and there are still a dozen empty seats up front.

    There’s also an entire flock of widebodies parked out at their hangar. Scary times for the airlines.

  3. I went to book a trip on United for next Monday from BOI-DEN, and it was $633 roundtrip. Delta was $474 for main cabin. If they’re hurting that bad, you’d think prices wouldn’t be so astronomical.

  4. ALL fellow United folks we need to file complaint to DoT now. I did.
    Airfares had been super cheap thanks to oil price and new technology. Idk if they can make the airfare go cheaper at this moment. The fare is pretty stable for different airlines and the price is largely depends on route. I mean $300 rt domestic vs $250 after corona discount? Would you buy in the discount right now? Then airlines is cheaper to ground those fuselages and keep the practical price in normal level to REDUCE loss.

  5. They bilked billions out of consumers for BS baggage fees and crappy snacks. They can survive a tough quarter or two without taxpayer bailouts.
    Any that fail are poorly run and deserve to fail. Let someone else buy their planes and slots.

  6. If you’re willing to travel in a pandemic, there are some incredible fares available. And some remarkable miles deals: I just saw transcons on AA for 10,000 miles roundtrip in Y mid-May. If you think the virus will be under control in the next couple of months, now’s the time to plan a trip.

  7. @NAUgrad05 – it’s a catch 22 for the airlines. They want to lower them so that they’ll sell, but they also have to keep them high/higher to make up for lost sales.

    On the other hand, award availability is wide open, pretty much anywhere.

  8. BTW, just landed from a two day domestic trip and took 4 different Delta flights. Every single one was full to capacity.

  9. Goodbye baggage and resort fees, a just comeuppance. The writing by hands washed for 20 seconds is on the wall.

  10. @Lucky

    Being the fanatic you are, you should listen to every airline presentation from the conference today.
    I was listening passively this morning and picked up few stuff. You probably have the most time and interest among us to go over all of it. Many interesting things from the airlines that you can digest and share. (and debate, LOL)

  11. This is going to get a lot worse before it gets better. My company came out with new rules last week that all “non essential” travel is banned and any travel to China, Italy or S. Korea is “prohibited”. We had been discouraged from travel for the past month, but it’s serious now – my boss was supposed to fly to company HQ yesterday and I see him at work this am because his boss deemed the meeting non-essential. So he cancelled.

    My wife’s company is even more draconian, banning all travel (foreign or domestic) for the duration, unless you have written permission from a top-level manager. Her place is a big pharmaceutical outfit. Needless to say, I am sure that these scenes are repeating throughout the economy. Whether it’s an overreaction (which I tend to think) or not, this is happening and travel/hospitality folks will be clobbered by it.

    We literally cannot fly for work and some of us are pretty sure we’ll lose status too.

  12. A few months ago, there were a ver few (handful) of readers in this forum applauded the way UA implemented to qualify for 1K, Platinum.. this year. They proudly stated that with the new policy, UA will “clean and sweep” those existing 1K’s for the newcomers who can five UA $24,000 a year. Well, let’s see how many of those new qualified 1K’s stand up and show loyalty to UA in this difficult time.

  13. A few months ago, there were a very few (handful) of readers in this forum applauded the way UA implemented for pax to qualify for 1K, Platinum.. this year. They proudly stated that with the new policy, UA will “clean and sweep” those existing 1K’s for the newcomers who can give UA $24,000 a year. Well, let’s see how many of those new qualified 1K’s stand up and show loyalty to UA in this difficult time. And even if they did, let’s see how it really helps UA. Look what you did Luc Bondra.

  14. AirAsia tickets from Jakarta to Singapore, which are usually in the range of $150-200 even in low seasons, dropped to $12 one way. Jetstar Asia and Scoot, SIA subsidiary, are not far behind in the low 20s.

  15. “I wish there was a disease where you’re afraid of clouds, because I think I could cure it. First, you sit the patient down and have a long personal talk. After that, I’m not sure, but maybe you could throw some water in his face or something.” – Jack Handy

  16. Oddly enough from what I can see UA actually had the highest cash on hand of the big 4 airlines at the end of 2019 ($4.9bn) whereas Delta had the lowest ($2.88bn). So might be a bit too soon to say who’s going to go bankrupt first.

  17. I flew LGA-DEN-PHX yesterday and the LGA-DEN had 10 empty seats on a 319.

    The DEN-PHX had maybe 25 empty seats also on a 319.

    LGA was quiet although DEN seemed somewhat normal as did PHX.

  18. As someone who was actually flying on 9/11 and regularly in the months and years following, with most flights on DL which I was flying at the time, they were around 1/3rd to half full. To compare this to 9/11 is pretty accurate.

  19. I tend to think United is the most vulnerable to the current downturn. Hubs in SF, Newark, and Houston (Oil) are all getting hit either due to oil declines or COVID19.

    I can say from what I’ve seen over the last week, most of my American flights have been at or just below full domestically. The only noticeable flight was from London where It was about 2/3 full (fairly low for this time of year).

  20. TCD – Actually, and surprsingly, American had the most cash at hand – almost $8 billion then United then Delta.

  21. Dan – the American figure I’ve seen is just under $4bn for just cash and short term investments for year end. Still higher than I would have thought to be honest.

    I guess the only thing anyone can really say is that the US airlines are seem to have at least a reasonable buffer.

  22. Last week, I was on a domestic flight that is usually about 95% full. It was about 80% full. Will probably drop more.

    I signed up for a professional conference in late March that has been postponed, maybe cancelled.

  23. Definitely higher than I had anticipated… but I’m not surprised, really. Alaska seems to be the only one who has jumped on a sale of late, in order to try and entice people to fly. United’s prices don’t reflect that they want to fill up their planes yet.

  24. Well just to provide some fact as to UAL financial condition from their 8-K filing today:

    On Monday, March 9, 2020, the Company raised an incremental $2 billion in new liquidity from a group of banks in the form of a secured term loan facility. As of close of business Monday, March 9, 2020, the Company had $8 billion of liquidity, including approximately $6 billion of unrestricted cash and short-term investments, and its fully undrawn revolving credit facility of $2 billion.

    So for those of you cheering for their demise, you could NOT be more wrong based on those numbers.

  25. @TCD – looking at cash/current assets is great, but can be misleading. Delta has objectively the strongest balance sheet of the Big 3. In the case of AA, they actually have negative shareholder’s equity.

    All this to say, Delta is the only of the Big 3 to have an investment-grade balance sheet and can access the capital markets at relatively favorable terms should it be necessary.

  26. Over the past 20 years flying has become a more stressful and negative experience for the average traveler: (1) a need to arrive 1.5-2 hrs before a domestic flight to go through an invasive security check, (2) navigating enormous hub airports to find gates, security lines, luggage carousels, local ground transportation, and huge offsite car rental centers, (3) crowded planes with cramped seating, (4) extra charges for reserved seating on some airlines, (5) no reclining seats on some airlines, (6) extra charges for checked luggage causing a need for luggage that is carefully sized and packed for security checks and proper fit in overhead bins, (7) extra charges for carry-on luggage on some airlines, (8) extra charges for water/snacks/meals on some airlines, (9) concerns that the manufacturer of the airplane you are flying on may have cut corners on safety, AND NOW (10) potential exposure to coronavirus at the airport or on board the plane. These things are really starting to add up to a very miserable experience. A car drive of 5-6 hrs looks pretty good for destinations closer to home.

  27. @LAXFlyer

    Took so long to scroll down to see someone who actually understands something about finance. Cash on hand is nice but having a strong business (that is reflected in the company’s balance sheet) is better.

  28. Perhaps United can now accelerate the installation of the “Polaris” seats on their 787-8/9’s now that the planes are likely parked.

  29. At times when demand of seats exceed supply, everyone fills up and make good profit (i.e. last 2 years). At times when demand slows down and everyone offers lowest price, the preferred carriers sell more seats than low quality carrier (i.e. UA with their basic economy). I foresee UA will suffer more this March and April more than other carriers.

  30. United has really focused on business travel and most major businesses have policies canceling all non-critical travel, both international and domestic. I would be interested to see how much of the drop is due to business travel v. leisure travel

  31. I hate to be such a cynical bastard, but I wonder how realistic that number is? Could well be positioning themselves for bailouts later if it comes to that.

  32. It’s corporate’s business travel policy reviews that are going to hurt the airlines more than domestic travel, as others have indicated I also work in a central government position and all our domestic and international travel has been suspended until further notice, we are being encouraged to work from home and take annual leave etc.

  33. Actually this kind of slow down is good for consumers as give it a few quarters of negative profits, airlines/ credit card companies will be doling out bonuses and better seats/service to entice people back. Recession is when companies recalibrate their loyalty programs until good time rolls again.

  34. The hope is that carriers like Korean Air, Norwegian, Hainan, TAP will go bankrupt. That should consolidate the industry some more and get rid of all those nasty LCC’s that literally ruined the industry’s profitability.

  35. P.S.
    – Competition is good for all of us of course – but some airlines tactics have made everyone’s life so much harder. Short term benefit for the consumer, long term pain for everyone.

  36. Just heard that Emirates’ bookings are up 12% vs last year. Meanwhile Qatar Airways is banning their own crew from entering Doha. Go figure.

  37. With the policies of 25+ hour change windows before getting refunds, is that surprising? Why would anyone take a change and book them right now? I’m curious to see what DL and AA report here. As for UA, this is not surprising.

  38. Not to worry. United has it all worked out. United will cancel your flight to consolidate passengers on the next flight the next day. Under United’s new policy regarding flight changes, the customer has the option of flying 24hrs later without an option to get a refund. Either wait 24 hrs for your next flight or go pound sand.

    A coinkydink – I don’t think so.

  39. This is unfortunate for United but any solidly run corporation needs to be able to weather storms on occasion. Perhaps they ought to tap into whatever trust fund or safety net they established with all the billions of dollars they’ve squeezed from consumers over the years in baggage fees, change fees, economy plus subscriptions, on-board WiFi, tax-sheltered paid upgrade fees, etc…. It actually feels somewhat gratifying to witness this timely revenue impact — perhaps United was a bit short-sighted with their latest changes to an entirely revenue-based MileagePlus Premier qualification program. They basically put all their eggs in the corporate-funded travel basket — thinking that gravy train would never stop — while also angering a portion of their loyal customer base. Well, COVID-19 brought expense account to a screeching halt. The icing on the cake is that I’m still booking long-distance international leisure trips for later in 2020, but doing so with other *A partners. UA’s new qualification policy made it abundantly clear that value-minded customers booking long-haul flights or even domestic nonstops are no longer a welcome demographic. They’re at least partly responsible for decimating their own customer base. Sorry, United, but sometimes it pays to have a diversified portfolio — ask anyone that was bond-heavy on February 21 that is now buying discounted stocks like its Christmas!

  40. We are in Uruguay with return to MIA from Cordoba Argentina on AA in paid J Mar 29. Been down here since late Jan. Checked my flight today, not changeable. Thinking of bailing to get home before the country shuts down. Looked at 1 way EZE home, $5k. Looked at using miles, 170 k and up. No slack. WTF?

  41. Oh how the mighty have fallen. Who cares how long they can last? Don’t bite the hand that feeds you. What comes around goes around.

  42. @Airways and Travels

    With the exception of Norwegian, the other carriers you mentioned are not LCC. What a jarring mistake that was! Are you knowledgeable on their pax profiles/pricing/routes/cabin classes/inflight service/aircraft types/lounges/FF programmes? Apparently not.

    And precisely who’s ‘hope’ is it these carriers will fail? Yours personally, or the American legacy carriers? I tell you with certainty that even if these particular carriers fail, the result will not be an industry consolidation.

  43. Bookings to asia down 100% might be due to the fact they’ve basically cut back/cancelled 99% of their asia flights.

  44. It isn’t just short term bookings that are terrible. Future bookings (2+ months out) have fallen off the cliff.

    Airlines (and the travel industry as a whole) are looking at a summer of hurt.

  45. I’ve been looking to fly AA, dca to clt in June. The economy web award fares, nonrefundable and non changeable, are as low as 5k miles. For the same flights, the regular, changeable fares are now 50k!! miles.
    Before the virus, the regular award flights were 7,500 to 15,000 miles. An ingenious form of price gouging. I don’t feel sorry for AA at all. The airlines are so out of touch with their customers.

  46. Also from the 8-K released today:
    “for the first quarter of 2020 the Company expects to incur a loss.”

    “Effective immediately, Oscar Munoz, the Company’s Chief Executive Officer and Scott Kirby, the Company’s President, are forgoing 100% of each of their respective base salaries through at least June 30, 2020.”

  47. my United flight to SFO this evening was so empty that they the captain made us all move behind row 24 for weight distribution then proceeded with a lecture on center of lift versus center of gravity.

  48. I got back Monday OGG-ORD-IAH. First was full. There might have been a few empties in the back.

    I just landed LAX from IAH. 1st was full. I didn’t see empties in the back.

    I have IAH-GUA Thursday then GUA-IAH-SFO-SIN Friday, all pretty full.

    United looks fine from here.

    I just wish United would dump the youth hostel 777-200s for Polaris Dreamliners. United should bring out its best now.

  49. The easiest number for everyone to understand is April revenue is expected to drop by 70%. Think about that. Not many businesses can survive that kind of drop, especially if it lasts. Politicians and everyone else need to get their heads out of the sand and realize how serious this is, and take steps to contain the spread not bailout companies. Cheap tickets are not the answer. China and Italy didn’t lock down their cities/countries for nothing or for the first 100 people that died. They did it because they could see the trajectory of illness/deaths and the chaos and far worse economic impact if they just hoped and prayed it would go away on its own.

  50. D: are you on a mileage run? Odd routing. Don’t worry about SIN–things are more or less back to normal here.

  51. I flew international a week and a half after 9/11. Most people on the plane had their own row. The atmosphere was tense to say the least. Of course, I was flying on American out of New York. If we are talking conditions like that the airlines are in trouble, especially if this turns out to not be seasonal in which case this will continue well into 2021. Unreal how badly the US is screwing this up and lets not forget China and their threatening doctors who tried to sound the alarm.

  52. This rush to applaud the loss of revenue and damage to the airlines viability, just remember those thoughts when it is announced the US taxpayer will once again absorb the loss of the revenue and bail them out.

    I am on the phone now trying to get United to make a change to my BCN-EWR-LAX mileage award to move it up a few days and they want to charge me more miles since I only paid 18k miles during the sale fares on Black Friday and fares now are over 34K miles. This is where the stupidity lies. What harm does it do to satisfy a Lifetime Platinum 2.5M Miler? They simply say we are willing to waive the change fees. Yet the plane looks about 60% empty three days before it leaves. They just don’t understand how to satisfy customers when it really costs them nothing.

  53. Just got off ek 377 Beijing to Dubai.
    First 2 partner and i
    Business 21.
    Economy 18.

    Service brilliant

  54. Can’t wait for the rich irony of seeing the US3 getting government bailouts after going after the ME3 for similar behaviour… .

  55. Not surprising at all, as my company has pretty much stopped all business related travel, including conferences and training. I was supposed to go to a conference in two weeks, but was told to cancel it.

    On the other hand, response times on the websites are super and fares appear to be lower than usual. Just booked a summer vacation for my family. 😉

  56. I wish they would reduce fares further but I can understand why they’re not. Anyone flying right now *has to fly*. No one is taking a weekend trip just for the heck of it even if fares are zero. So lowering prices won’t really stimulate more demand right now. All it does is give better deals to people who would be flying regardless of the price.

  57. Ugh, my clients are all cancelling/prohibiting non-essential travel, which for me means pretty much all my travel.

    I just had all four of my domestic flights cancelled next week and don’t have any planned through April.

    Curious if they’ll come out with any changes to 2021 status requirements. Depending on the length of these policies, I might not be able to requalify for EP for the first time in a while…

    I guess I should check out some of the cheap A321T transcons from JFK to LAX/sFO that I keep hearing about…

  58. Really curious to see what the airlines are going to do with their frequent flyer programs. I expect there to be bonuses and other giveaways to entice people to travel.

  59. Well the billions they collected in ridiculous fees will help soften the blow. Maybe they can start to lower prices too? Still nearly $900 business class return from LAX to ORD.

  60. I can believe it. SFO is a ghost town today. There are probably more staff than passengers in the Polaris Lounge.

  61. Don’t like United after they tried to charge double the price as my billing address isn’t in US. Would happily fly anyone else and will be doing so. Happy to see them tank.

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