What happened

Shares of United Airlines Holdings (NASDAQ:UAL) are losing altitude today following the release of the airline's fourth-quarter results, and are down about 5% as of this writing. The quarter, as expected, was terrible, but investors are likely reacting negatively to United's tepid guidance.

So what

After markets closed Wednesday, United reported an adjusted fourth-quarter loss of $7 per share on revenue of $3.4 billion, worse than analyst expectations for a $6.60 loss per share on revenue of $3.44 billion.

A United 787 leaving the hanger.

Image source: United Airlines.

We knew going in that the loss would be substantial. United and other airlines have been devastated by the pandemic, which has caused travel demand to crater. United survived by raising cash and cutting costs, but there is no quick fix for what ails these companies.

"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making," CEO Scott Kirby said in a statement. "But, the truth is that COVID-19 has changed United Airlines forever."

Now what

The question for investors is how soon we might see a turnaround. United said it expects first-quarter 2021 revenue to be down 65% to 70% year over year. That's worse than the 60% to 65% decline Delta Air Lines forecast last week on what was generally an optimistic post-earnings call.

Delta, like United, posted a fourth-quarter loss that was slightly worse than expectations, but the stock ticked up after earnings on the outlook. 

I've been saying for a while now that Delta is likely to recover ahead of United in part because Delta's route network is better prepared for the leisure, domestic-focused recovery we are likely to see in 2021. United's network prior to the coronavirus was the envy of the industry because it catered so well to business and international travel, but what was once a strength is now a near-term weakness.

United is trying to control what it can, focusing on removing up to $2 billion in annual costs, and has $19.7 billion in available liquidity. The airline will survive, but investors on Thursday weren't very enthusiastic about climbing on board and riding out the storm.

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.