View of a United Airlines plane at Barcelona Airport in Barcelona, Spain, February 27, 2023.
Joan Valls | Nurphoto | Getty Images
United Airlines posted a loss for the primary three months of the 12 months as business travel declined and leisure travelers returned to more traditional travel periods, however the carrier’s CEO said it expects a profit within the second quarter due to strong bookings firstly of the height travel season.
The airline joined the rival Delta Airlines reporting a powerful demand for travel within the spring and summer, despite some forecasts of an economic slowdown.
United chief executive Scott Kirby said on Wednesday the economy was strong but warned the airline needed to arrange for potential weakness and economic shocks.
Kirby described the bookings of huge corporate clients as weak in comparison with the demand for leisure, especially for international leisure. He told CNBC’s Squawk Box that the collapse of Silicon Valley Bank earlier this 12 months caused a double-digit decline in business travel bookings “literally overnight.” He said those bookings rebounded quickly.
For the second quarter, United expects adjusted earnings per share of $3.50 to $4 and revenue growth of 14% to 16% over last 12 months, with capability increasing 18.5% over last 12 months.
United shares were up about 3% in Wednesday morning trading.
Here’s how United fared in the primary quarter in comparison with Wall Street expectations, based on average estimates compiled by Refinitiv:
- Adjusted loss per share: a lack of 63 cents versus the expected 73 cents
- Total income: USD 11.43 billion in comparison with the expected USD 11.42 billion
In the three months ended March 31, United generated $11.43 billion in revenue, broadly according to analyst forecasts and greater than 51% greater than in the identical period last 12 months. United posted a net lack of $194 million, or 59 cents a share, compared with a lack of $1.4 billion, or $4.24 a share, in the primary quarter last 12 months.
Adjusting for one-offs, United reported a loss per share of 63 cents, lower than the 73 cents expected by analysts polled by Refinitv, but on the stronger end of the previously reported loss per share range of between 60 cents. cents and one dollar.
Revenue per passenger mile, which shows how much money airlines make versus how much they fly, is up greater than 22% from last 12 months.
Unit costs were up 4% year-on-year, but down 0.1% for fuel removal. The airline paid $3.33 a gallon for jet fuel, up from $2.88 a gallon in the primary quarter of 2022.
United management will discuss the outcomes with analysts and the media on Wednesday at 10.30am
Management is more likely to face questions on growth constraints within the second and third quarters, when airlines generate most of their revenue.
United and other airlines plan to scale back flights to the New York area in the approaching months in response to the shortage of air traffic controllers, although carriers plan to make use of larger planes where possible.
Airlines are also facing a shortage of recent aircraft after delays from manufacturers Boeing and Airbus.
Last week, Boeing warned that a defect in two of the eight brackets on some 737 Max jets could slow deliveries of recent planes. United chief executive Scott Kirby said on Wednesday that the issue gave the impression to be a “small pothole” and that Boeing had supplied the airline before.
