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United Airlines (UAL) 1Q 22 results

United Airlines Boeing 777ER. Plane for Leonardo da Vinci airport in Fiumicino.

Massimo Insabato | Mondadori Wallet | Getty Images

United Airlines expects to turn a profit in 2022 for the first time since before the pandemic, as bookings and airfares rise.

United shares rose more than 4% in after-hours trading on Wednesday after the results were released.

United’s first-quarter revenue was $7.57 billion, a far cry from the $9.59 billion reported three years earlier, but more than double the $3.22 billion it a year ago.

Adjusting for one-time items, it recorded a loss of $4.24 per share. The company paid $2.88 a gallon for fuel in the first quarter, down from $2.05 in 2019 and $1.74 last year. Excluding fuel, its costs jumped 18% over the same period of 2019.

For the second quarter, United forecasts operating margin of 10%, non-fuel costs up 16% and revenue per passenger mile up 17%, as higher fares help cover the increase spending.

The Chicago-based airline is the second major U.S. carrier to report results and provide guidance for the peak travel season in the spring and summer, when airlines generate the bulk of their annual revenue. Delta Air Lines reiterated last week that it expects a return to profitability this year.

Here’s how United fared in the first quarter relative to Wall Street expectations, based on average estimates compiled by Refinitiv:

  • Adjusted earnings per share: a loss of $4.24 versus an expected loss of $4.22
  • Total revenue: $7.57 billion vs. $7.68 billion forecast.

Despite strong demand, United are being challenged to add capacity. Its 52 Pratt & Whitney-powered Boeing 777s, some of the largest planes in its fleet, which have been grounded since an engine failure in February 2021, will not return until mid-May at the earliest, CNBC reported earlier this this month. And deliveries of new Boeing 787 Dreamliners have been suspended for much of the past 18 months due to manufacturing defects.

The airline is also facing a shortage of pilots, especially at the regional carriers that feed its hubs, an industry-wide problem.

Airline bookings, overall, surged after Covid cases peaked and then subsided this winter, easing the rocky start to 2022 that carriers have faced. Airline executives expect that after more than two years of the pandemic, many locked-in travelers will continue to fuel travel demand, even as fares have risen.

United expect to fly 87% of their 2019 schedule in the second quarter. With Delta, United has been more cautious about adding capacity compared to rivals like American Airlines and fast-growing low-cost carriers like Spirit Airlines.

However, some carriers, such as Spirit, Alaska Airlines and JetBlue Airways, are cutting spring and summer schedules to have flexibility to deal with disruptions like bad weather or staff shortages.

New American Airlines CEO Robert Isom told staff last week that reliability is paramount this season. Customers of U.S. and other carriers faced massive offers and cancellations last year after carriers grappled with routine disruptions and staffing shortages.

United executives will discuss the results with analysts and the media on a call at 10.30am ET on Thursday. American Airlines will release its results before market open Thursday and hold a call at 8:30 a.m. ET.

This is breaking news. Please check for updates.

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