United Airways (UAL) 2Q 21 narrows losses
A United Airlines Boeing 737 Max 9 lands at San Francisco International Airport on March 13, 2019 in Burlingame, California.
Justin Sullivan | Getty Images
United Airlines reported higher revenue in the second quarter on Tuesday and reduced its losses thanks to an air traffic resurgence, the newest airline to release an enlightenment outlook for one of the sectors hardest hit by the pandemic.
The Chicago-based airline expects positive adjusted pre-tax earnings for the third and fourth quarters and plans to expand air travel in response to higher travel demand. Delta Air Lines and American Airlines also announced last week that they have seen improvements in bookings and financial results.
United’s revenue for the three months ended June 30 of $ 5.47 billion declined more than 50% from the same quarter of 2019, but decreased nearly 70% from the first quarter of the year as US Officials largely reopened Covid vaccines this spring and more customers returned to air travel.
However, United still posted a net loss of $ 434 million for the three months ended June 30, the sixth consecutive quarterly loss. United lost nearly $ 1.4 billion in the first three months of 2021. The airline said it recorded $ 1.1 billion in revenue from a federal salary grant, part of the $ 54 billion that Congress has reserved for U.S. airlines since March 2020.
Here’s how United performed in the second quarter compared to Wall Street’s expectations, based on Refinitiv’s average estimates:
- Adjusted earnings per share: a loss of $ 3.91 is as expected.
- Total sales: $ 5.47 billion versus expected revenue of $ 5.37 billion.
United shares lost less than 1% in after-hours trading.
The airline said it closed the second quarter with around $ 23 billion in available cash.
Without one-time items, United posted a loss per share of $ 3.91, which is in line with analyst estimates.
United said its capacity for the current quarter will be 26% below 2019 levels. In the second quarter it flew 46% less than in 2019. The cost per seat mile, excluding fuel and other special fees, is likely to increase by 17% compared to the third quarter of 2019, partly due to shorter routes than usual and with smaller planes.
Fuel costs have also increased. United said it paid an average of $ 1.97 a gallon for jet fuel in the second quarter, nearly 67% more than a year ago.
Airlines have reported an increase in bookings since this spring as vaccines became widespread, Covid cases declined, and officials lifted pandemic-era restrictions.
United executives are due to discuss the findings and provide an in-depth look at Wednesday at 10:30 a.m. ET.
Analysts are expected to survey airline management on trends in international bookings and business travel, two pillars of United’s business prior to the pandemic. The rapidly expanding Delta variant has raised concerns about new travel restrictions.
On Monday, the State Department and the Centers for Disease Control and Prevention advised against traveling to the UK due to rising case numbers.
But United and other airlines were optimistic about the recovery in demand. United last month announced it would purchase 270 narrowbody jets from Boeing and Airbus, the largest aircraft order ever, to replace older aircraft and grow the airline over the next several years.