United Airlines will record a special non-cash impairment on its Hong Kong routes owing to a fall in demand.
The Chicago-based airline will take a $90 million impairment on its routes to the Asian city, which are pledged under its $1.5 billion 2017 term loan, due to lower unit revenues owing to a decrease in demand.
“Notwithstanding such impairments, the collateral pledged under the company’s term loan continues to be sufficient to satisfy the loan covenants,” United states in an SEC filing today.
United operates direct flights to Hong Kong from Newark Liberty International and San Francisco, according to Cirium schedules data. The airline doubled its frequency from San Francisco in October.
In 2018, the airline realized a $206 million ($160 million net of taxes) impairment relating to its Hong Kong routes.
United will report its 2019 full year results on 22 January.
