United Airlines: Covid surge to cut 2022 capacity, pressure costs

Bloomberg

United Airlines Holdings Inc. expects a delayed recovery in air travel this year as the coronavirus resurgence pressures business and leisure travel, slowing the carrier’s momentum after a robust holiday season pushed its fourth-quarter results above Wall Street’s estimates.
The spreading omicron variant prompted United to lower its capacity forecast for 2022 to below the 2019 level, according to a statement Wednesday detailing quarterly results. The airline previously said it expected this year’s capacity to surpass 2019 by 5%.
The surge in new infections has upended multiple industries and forced many employees to continue working from home, hurting business travel that’s a staple of United’s franchise. The Chicago-based company’s views on the delayed rebound echo comments last week from rival Delta Air Lines Inc.
“While omicron is impacting near-term demand, we remain optimistic about the spring and excited about the summer and beyond,” United Chief Executive Officer Scott Kirby said in the statement.
The reduced capacity also complicates United’s efforts to lower its non-fuel unit costs to below its 2019 level, a target it laid out for investors last year. While the airline likely won’t achieve that goal in 2022, it’s on track to meet that target next year. United shares fell 1.7% as of 5:10 pm after the close of regular trading in New York.
The carrier reported a loss of $1.60 a share for the final three months of 2021 on an adjusted pretax basis, extending a string of pandemic-driven losses to the eighth consecutive quarter. Still, that was better than $2.11 loss expected by analysts, according to the average of estimates compiled by Bloomberg. Revenue was $8.19 billion, while analysts expected $7.95 billion.
Unit costs excluding fuel rose 13% compared to the fourth quarter of 2019, the last year before the pandemic battered the airline industry.