What happened

Shares of United Airlines Holdings (NASDAQ:UAL) closed down more than 3% on Thursday and were down 12% earlier in the trading session, as the carrier's troubles continue to mount. It was a down day for most of the airlines, but United continues to underperform.

So what

It's been a rough week for United shareholders. The carrier, like all airlines, have been hit hard by the COVID-19 pandemic. The industry is dealing with substantial losses and uncertain future demand by cutting flights, grounding planes, and looking for other ways to cut costs.

A United 737 taxis on the runway.

Image source: United Airlines.

United has been juggling a series of company-specific issues, as well. The airline has financial exposure to Colombia's Avianca Holdings, which filed for bankruptcy over the weekend. United took a $1 billion special charge in the first quarter related to the falling value of its investment in Avianca, and risks losing a key Latin American partner if the reorganization doesn't go well.

Late last week, the airline was forced to pull a planned $2.25 billion note offering, reportedly due to tepid demand. On Thursday, it was sued by a Chicago airport worker seeking class action status, arguing that United is violating the spirit of the government bailout program by requiring workers to take 20 unpaid days off this summer.

Now what

United shares are now down 76% year to date, second worst among airlines and ahead of only Spirit Airlines. The sell-off of shares suggests investors are worried that bankruptcy is possible.

United can survive without a restructuring, but the airline faces an uphill challenge ahead. The idea that it might emerge from the pandemic with new labor issues to work through only adds to concerns about the company's long-term future.

With a growing number of problems popping up around the airline, coupled with existential questions about whether the airline industry can survive the pandemic and its aftereffects, it's no wonder investors aren't seeing much reason to buy in.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.