United Airlines narrows loss, plans to ramp up flying to meet strong travel demand


A United Airlines Boeing 737 Max 9 plane lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.

Justin Sullivan | Getty Images

United Airlines on Tuesday reported increased second-quarter income and a narrower loss thanks to a resurgence in air travel, the newest service to concern a brightening outlook for one of many Covid pandemic’s most battered sectors.

The Chicago-based airline mentioned that it expects to generate optimistic adjusted pretax earnings for the third and fourth quarters and that it plans to ramp up flying in response to increased travel demand. Delta Air Lines and American Airlines final week additionally mentioned they’ve seen an improvement in bookings and financial results.

United’s income of $5.47 billion for the three months ended June 30, was down by greater than 50% from the identical quarter of 2019 however up practically 70% from the primary quarter of the 12 months as U.S. officers rolled out Covid vaccines broadly this spring, points of interest reopened and extra clients returned to air travel.

However, United nonetheless posted a web lack of $434 million, its sixth consecutive quarterly loss. In the primary three months of 2021, United had a lack of practically $1.4 billion and a lack of $1.63 billion within the second quarter of 2020. The airline mentioned it recorded $1.1 billion in earnings from a federal payroll grant, a part of the $54 billion Congress put aside for U.S. airways since March 2020.

Here’s how United carried out within the second quarter in contrast with what Wall Street anticipated, primarily based on common estimates compiled by Refinitiv:

  • Adjusted outcomes per share: a lack of $3.91, in keeping with expectations.
  • Total income: $5.47 billion versus anticipated $5.37 billion in income.

United’s shares had been down lower than 1% in after-hours buying and selling.

The airline mentioned it ended the second quarter with about $23 billion in out there liquidity.

Adjusting for one-time objects, United posted a per-share lack of $3.91, in keeping with analysts’ estimates.

United mentioned its capability for the present quarter can be down 26% from 2019 ranges. In the second quarter, it flew 46% lower than in 2019. It mentioned its price per seat mile, excluding gas and different particular expenses, will doubtless be up 17% over the third quarter of 2019, partly due to flying shorter routes than traditional and utilizing smaller planes.

Fuel costs have additionally climbed. United mentioned it paid a median of $1.97 a gallon for jet gas within the second quarter, up practically 67% from a 12 months in the past.

Airlines have reported a surge in bookings since this spring as vaccines rolled out broadly, Covid circumstances fell and officers dropped pandemic-era restrictions.

In addition to increased travel demand, cargo income rose practically 51% from final 12 months to $606 million. While a small a part of United’s total gross sales, air cargo demand has been a vibrant spot in the course of the pandemic for the service and others.

United executives are scheduled to talk about the outcomes and supply a extra in-depth outlook on a 10:30 a.m. ET name Wednesday.

Analysts are anticipated to quiz airline administration about traits in worldwide and enterprise travel bookings, two pillars of United’s enterprise earlier than the pandemic. The fast-spreading delta variant has raised issues about renewed limits on travel.

On Monday, the State Department and Centers for Disease Control and Prevention suggested in opposition to travel to the U.Ok. due to rising case counts.

But United and different airways have been upbeat concerning the demand restoration. United final month mentioned it plans to purchase 270 Boeing and Airbus narrow-body jets, its largest aircraft order ever, to substitute older planes and develop the service over the following a number of years.



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