United Airlines (UAL) Q2 2022 earnings

United Airlines on Wednesday recorded a key profit milestone during its pandemic recovery, but said it would scale back its growth plan through 2023.

United reported a first-quarter profit — $329 million — since the Covid-19 pandemic began without the help of a federal payroll aid, which expired nearly a year ago.

The unit’s revenue in the second quarter increased 24% compared to 2019 thanks to strong travel demand, even with sky-high fares, while unit costs, excluding fuel, increased 17% compared to the previous quarter. period from April to June of the previous three years. Fuel costs have also skyrocketed.

“It’s great to get back to profitability – but we face three risks that could develop over 6-18,” United CEO Scott Kirby said in an earnings release. next month. “Operating challenges across the industry that limit system capacity, record fuel prices, and the growing likelihood of a global recession are the real challenges we’re addressing.”

An airplane takes off from O’Hare International Airport on January 18, 2022 in Chicago, Illinois.

Scott Olson | beautiful pictures

The Chicago-based airline estimates third-quarter capacity will be 85% compared with the same period in 2019, and fourth-quarter capacity will be restored to 90% from three years ago, before the pandemic – a plan. Plans are relatively conservative as the airline is looking to cut back on flying to become more reliable.

Rival airlines Delta, Southwest, JetBlue and others, have also cut their schedules recently.

Next year, United said it plans to expand its flight operations by no more than 8% from 2019, down from a previous forecast of 20% growth.

Shares fell nearly 7% in after-hours trading after the airline reported results.

Here’s United’s second-quarter performance compared to what Wall Street expected, based on median estimates compiled by Refinitiv:

  • Adjusted loss per share: $1.43 versus $1.95 expected.
  • Total revenue: $12.11 billion versus $12.16 billion expected.

United’s report came out a week later Delta report a second quarter sales soar and forecast travel demand to continue through the end of the summer peak season. American Airlines reports second-quarter results and third-quarter forecasts before the market opens on Thursday.

Costs, including a year-over-year spike in fuel prices, continue to weigh on airlines’ profits as they try to find a way out of the pandemic.

United said it expects unit costs excluding fuel to remain elevated this year, up 16% to 17% in the third quarter and up about 14% in the fourth quarter from three years earlier.

United executives will host an earnings call with analysts and media at 10:30 a.m. ET on Thursday.

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