On Wednesday, United Airlines noted an important milestone in its pandemic improvement, but said it would step down its growth plans through 2023.
United reported its first quarter result – $ 329 million – since the Covid-19 pandemic began without the help of federal wage aid, which expired almost a year ago.
Unit revenues in the second quarter increased by 24% compared to 2019 thanks to strong travel demand, even at sky-high prices, while unit costs, excluding fuel, increased by 17% compared to the April-June period three years ago. Fuel costs also rose.
“It’s nice to go back to profitability – but we have to face three risks that could grow over the next 6-18 months,” United boss Scott Kirby said in a statement. “Industry-wide operational challenges that limit the system’s capacity, record high fuel prices and the growing potential for a global recession are all real challenges that we are already addressing.”
An aircraft takes off from O’Hare International Airport on January 18, 2022 in Chicago, Illinois.
Scott Olson | Getty pictures
The Chicago-based airline estimated that capacity in the third quarter would be 85% of the same quarter in 2019, and that capacity in the fourth quarter would be 90% restored compared to three years ago, before the pandemic pulled out – a relatively conservative plan they are seeking after. to trim flight to become more reliable.
Rival airlines Delta, Southwest, JetBlue and others, have also trimmed their schedules recently.
Next year, United said they plan to expand the flight by no more than 8% during 2019, down from an earlier forecast of 20% growth.
The shares fell almost 7% in after-sales after the airline reported results.
Here’s how United performed in the second quarter compared to what Wall Street expected, based on average estimates compiled by Refinitiv:
- Adjusted loss per share: $ 1.43 against an expected $ 1.95.
- Total income: $ 12.11 billion against the expected $ 12.16 billion.
United’s report comes a week after Delta reported a jump in second-quarter sales and predicted continued travel demand through the end of the high summer season. American Airlines reports its results for the second quarter and forecast for the third quarter before the market opens on Thursday.
Costs, including a jump in fuel prices compared to last year, continue to weigh on the airlines’ bottom lines as they try to dig themselves out of the pandemic.
United said it expects unit costs excluding fuel to remain high through this year, up 16% to 17% in the third quarter and up around 14% in the fourth quarter from three years earlier.
United executives will hold an earnings talk with analysts and media at 10:30 a.m. Thursday.