United reported its first quarterly profit — $329 million — since the Covid-19 pandemic began without the help of federal payroll assistance, which ended nearly a year ago. Unit revenue in the second quarter rose 24% from 2019 thanks to strong travel demand, even at high fares, while unit costs, excluding fuel, rose 17% in the April-June period three years ago years. Fuel costs also increased. “It’s nice to be back to profitability – but we have to address three risks that could increase over the next 6-18 months,” United chief executive Scott Kirby said in an earnings release. “Operating challenges across the industry that limit system capacity, record fuel prices and the growing possibility of a global recession are real challenges we are already facing.” An airplane takes off from O’Hare International Airport on January 18, 2022 in Chicago, Illinois. Scott Olson | Getty Images The Chicago-based airline estimated its third-quarter capacity would be 85% of the same quarter in 2019, and fourth-quarter capacity would be restored 90% compared to three years ago, before the pandemic travel – a relatively conservative plan as it seeks to cut flying to become more reliable. Rival airlines Delta, Southwest, JetBlue and others have also cut routes recently. Next year, United said it plans to expand flights by no more than 8% in 2019, down from a previous forecast of 20% growth. Shares fell nearly 7% in after-hours trading after the airline reported results. Here’s how United performed in the second quarter compared to Wall Street’s expectations, based on average estimates compiled by Refinitiv:
Adjusted loss per share: $1.43 vs. $1.95 expected. Total revenue: $12.11 billion vs. $12.16 billion expected.
United’s report comes a week after Delta reported a jump in second-quarter sales and forecast continued travel demand through the end of the summer peak season. American Airlines reports second-quarter results and third-quarter guidance before the market opens on Thursday. Costs, including higher fuel prices compared to last year, continue to weigh on airlines’ bottom lines as they try to find their 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 about 14% in the fourth compared with three years earlier. United executives will hold an earnings conference call with analysts and the media at 10:30 a.m. ET on Thursday.
