United Airlines reported a net loss of $1.6 billion in the "most difficult financial quarter” in its 94-year history compared with a net profit of $1.05 billion a year earlier.

Its adjusted loss, which excludes an income tax benefit and other items, was $2.6 billion.

Total operating revenues were down 87.1% year-over-year, on an 87.8% decrease in capacity year-over-year.

It took a $47 million impairment for aircraft engines removed from operations, a $6 million charge for the early termination of several regional aircraft finance leases and $8 million in other miscellaneous impairments.

The Chicago-based carrier also recorded impairment charges of $80 million for its China routes. Due to the COVID-19 pandemic and the subsequent suspension of flights to China, United determined that the value of its China routes had been impaired in the first quarter. The additional impairment in the second quarter was the result of a further delay in the expected return of full capacity to the China markets.

Total liquidity as of the close of business 20 July was approximately $15.2 billion. United expects liquidity at the end of the third quarter to be “over” $18 billion.

United says in a regulatory filing that it did the "best job of matching actual capacity to demand” among its largest network peers. It also expects to finish the quarter with the lowest average daily cash burn among large network carriers.

Cash burn during the second quarter averaged $40 million a day, including $3 million of principal payments and severance expenses. It is forecasting average daily cash burn to be approximately $25 million during the third quarter including $6 million of principal repayments and severance expenses.

On July 14, Delta reported a $5.7 billion net loss during the period compared with a $1.4 billion net profit during the three months ending in June 2019.  Operating revenues fell by more than $11 billion, or 88%, year-over-year to $1.5 billion.

In the third quarter, United expects consolidated system capacity to be down 65% versus the year-earlier period. It will continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand. It expects demand to remain suppressed until the availability of a widely accepted treatment and/or vaccine for COVID-19.

"I am grateful for the professionalism and dedication of our United team members who persevered through a historic and challenging period to deliver for our customers," says chief executive officer Scott Kirby. "While this unprecedented crisis has been difficult for our team, we expect United produced fewer losses and lower cash burn in the second quarter than any of our large network competitors. We accomplished this by quickly and accurately forecasting the impact that COVID would have on passenger and cargo demand, accurately matching our schedule to that reduced demand, completing the largest debt financing deal in aviation history, and cutting expenses across our business. We believe this quick and aggressive action has positioned United to both survive the COVID crisis and capitalize on consumer demand when it sustainably returns."

Since the start of the crisis, United has raised a total of $16.1 billion through debt offerings, stock issuances and the CARES Act Payroll Support Programme grant and loan, among other items.

As of 2 July, it raised $6.8 billion in financings secured against MileagePlus in the form of a $3.8 billion bond and a $3.0 billion term loan, with interest rates of 6.5% and Libor plus 5.25%, respectively.

It also entered into an equity distribution agreement for the issuance and sale from time to time of up to 28 million shares of UAL common stock in "at-the-market" offerings. United utilized the at-the-market programme to raise $22 million through the sale of approximately 532,000 shares in the second quarter.

To further boost its cash position, United entered into an agreement with a subsidiary of BOC Aviation to finance through a sale-and-leaseback transaction six Boeing 787-9 and 16 Boeing 737 Max 9 aircraft. The aircraft are scheduled to deliver in 2020.

United reduced total operating costs by 69% versus the second quarter of 2019.

Full-year 2020 adjusted capital expenditures are now expected to be approximately $3.7 billion.

United says 6,000 have volunteered to take severance packages and leave. The airline has warned 36,000 employees could be furloughed in October. 

The carrier is expecting a July load factor of 45%, with less than 15% of flights with more than 70% of seats filled.

American Airlines and Southwest Airlines are scheduled to release results on 23 July.