United Airlines (United Airlines Holdings Inc NASDAQ: UAL) reported today some really staggering losses . The Chicago-based airline said that during the three months ended March 31, 2020, UAL recorded a pre-tax loss of $2.1 billion.
United Airlines expects to receive approximately $5.0B from the U.S. Treasury Department through the bailout program known as Payroll Support Program under the CARES Act. These expected funds from the U.S. Treasury Department will be used to pay for the salaries and benefits of United employees. Of the $5.0 billion total amount the Company expects to receive, approximately $3.5 billion will be a direct grant and approximately $1.5 billion will be in the form of a low interest 10-year senior unsecured promissory note.
Besides this it is expected of UAL to issue warrants to the U.S. Treasury Department , 4.6 million shares of UAL common stock at a strike price of $31.50 per share . Honestly this is a great deal, because UAL stock opened at $27.93 per share and lost 7% in the first 30 minutes of the trading day on Monday.
It is expected that the warrants will expire five years from the date of issuance, and will be settled either through net share settlement or cash, at the United Airlines option.
On Friday we reported that UAL entered into a deal with BOC aviation to sell 22 Boeing planes .
In other news-United employees who usually handle baggage are now leading a company wide effort to transform empty cargo facilities into food distribution centers.