United to take $90 million charge for Hong Kong disruptions

Business

CHICAGO (AP) — United Airlines said Tuesday it will take a $90 million charge against fourth-quarter earnings because of a drop in value of its routes to Hong Kong, the scene of anti-government protests in recent months.

United said lower demand for travel to Hong Kong reduced its revenue for each seat flown one mile, a measure that airline investors watch closely. The company said that led to its calculation of the non-cash impairment charge.

The grounding of the Boeing 737 Max has also hurt United, causing it to cancel thousands of flights. The airline has pulled the plane from its schedule until early June, about two months longer than American and Southwest.

Chicago-based United Airlines Holdings Inc. is scheduled to release fourth-quarter results after the market closes on Jan. 21.

Analysts surveyed by FactSet expect United to report net income of $653 million, adjusted earnings of $2.64 per share and revenue of $10.88 billion in the quarter.

A year earlier, the airline earned $462 million, adjusted earnings of $2.41 per share and revenue of $10.49 billion.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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