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United Airlines (UAL) expects omicron push to further delay recovery


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

Scott Olson | Getty Images

United Airlines said surging Covid-19 infections have hurt bookings in recent weeks and will further delay its recovery from the pandemic.

The Chicago-based airline said it expects first-quarter revenue to be 20% to 25% lower than the same period in 2019, when it generated $9.59 billion.

United lowered its growth forecast for 2022, saying it would fly less this year than three years ago, abandoning its plan to increase capacity by 5% from pre-pandemic levels. Costs for the first quarter would increase by up to 15%, excluding fuel, and capacity would decrease by 16% to 18% compared to three years earlier.

United shares fell more than 2% in after-hours trading.

The airline said spring and summer bookings were strong, however.

β€œThe United team has fought through unprecedented odds to, once again, overcome the new and daunting challenges that COVID-19 brings to aviation, and I am grateful to each of them for their commitment. to take care of our customers,” United Airlines CEO Scott Kirby said in a statement on the results. “Omicron is impacting near-term demand, we remain optimistic for spring and excited for summer and beyond.”

Last week, Delta Air Lines also said the omicron variant had cut bookings in early 2022 early this year and would lead it to a loss in the first quarter, but expected to be profitable. by March, predicting a rebound in travel demand.

American Airlines reports ahead of market open Thursday.

United posted a net loss of $646 million, compared to a profit of $641 million in the fourth quarter of 2019, but less than the $1.9 billion lost in the same quarter of 2020.

Revenue for the last three months of the year was $8.19 billion, down nearly 25% from 2019, but it was its strongest quarter of the pandemic thanks to strong vacation bookings. It was ahead of analysts’ estimates of $7.97 billion.

Adjusting for one-time items, United posted a loss per share of $1.60, better than analysts’ estimate of $2.11.

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

  • Adjusted earnings per share: a loss of $1.60 compared to an expected loss of $2.11
  • Total income: $8.19 billion vs $7.97 billion expected.

United executives will hold a call with analysts and the media on Thursday at 10:30 a.m. ET.


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remon

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