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United Airlines (UAL) 2Q 2022 earnings

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United Airlines on Wednesday notched a key profit milestone in its pandemic recovery, but said it’s going to reduce its growth plans through 2023.

United reported its first quarterly profit — $329 million — because the Covid-19 pandemic began without the assistance of federal payroll aid, which expired almost a 12 months ago.

Unit revenues within the second quarter surged 24% over 2019 because of strong travel demand, even at sky-high fares, while unit costs, excluding fuel, rose 17% over the April-June period of three years ago. Fuel costs also soared.

“It’s nice to return to profitability — but we must confront three risks that would grow over the subsequent 6-18 months,” United CEO Scott Kirby said in an earnings release. “Industry-wide operational challenges that limit the system’s capability, record fuel prices and the increasing possibility of a world recession are each real challenges that we’re already addressing.”

An aircraft 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 capability could be 85% of the identical quarter of 2019 and fourth-quarter capability could be 90% restored compared with three years ago, before the pandemic hamstrung travel — a comparatively conservative plan because it seeks to trim flying with a view to change into more reliable.

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

Next 12 months, United said it plans to expand flying not more than 8% over 2019, down from an earlier forecast for 20% growth.

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

Here’s how United performed within the second quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

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

United’s report comes every week after Delta reported a jump in second-quarter sales and forecast continued travel demand through the tip of the height summer season. American Airlines reports its second-quarter results and third-quarter forecast before the market opens on Thursday.

Costs, including a jump in fuel prices over last 12 months, proceed to weigh on airlines’ bottom lines as they fight to dig their way out of the pandemic.

United said it expects unit costs excluding fuel to stay elevated through this 12 months, up 16% to 17% within the third quarter and up about 14% within the fourth from three years earlier.

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

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