United Airlines CEO Scott Kirby on Wednesday said he expects airfares to slip as the pandemic continues to depress demand for flights.
“My guess is that pricing is going to go lower for the short-term,” Kirby told CNBC’s “Squawk Box.” All of the normal pricing metrics … in this pandemic are a little bit irrelevant.”
The airline posted a more than $1.6 billion loss in the three months ended in June and is now focused on shaving more than a third off its daily cash burn rate from $40 million during the second quarter to $25 million in the third quarter.
“The most important metric is cash burn,” he said.
The pandemic and travel restrictions designed to stop it from spreading have devastated air travel demand. United has been cautious about adding flights and said it could pull back capacity even more, depending on future demand.
Kirby said demand has appeared to have bottomed out after slipping in recent weeks, but that revenue could plateau at 50% of 2019 levels, until there’s a widely available vaccine for Covid-19. United’s revenue fell more than 87% in the second quarter from a year earlier.