United Airlines reports first quarter 2022 net loss of $1.4 billion

United Airlines has just reported first quarter 2022 financial results and announced it expects to return to profitability in the second quarter on a robust operating revenue outlook, including total revenue per available seat mile (TRASM) of approximately 17% over 2019, the strongest second quarter revenue guidance in company history. The company expects to be solidly profitable in the second quarter with an approximate 10% operating margin (on both a GAAP and adjusted basis1), just 2.9 points less than 2019 operating margin and 3.5 points less than 2019 adjusted operating margin, despite cost headwinds driven by the recent fuel price spike.

As the company's Pratt & Whitney-powered Boeing 777 aircraft are expected to gradually return to service, the company will continue to add back capacity based on its ability to best serve customers and will take a long-term view of profitability by not sacrificing operational reliability. The company is also seeing indications that business travel is rapidly returning and expects further improvement in international travel, including Asia.

The airline has a bullish outlook on the future – bolstered by this persistent strength of demand and the fact that it is nearing 2019 operating margins – and once again reiterated confidence in its longer term United Next targets of adjusted pre-tax margin2 of approximately 9% in 2023 and about 14% in 2026. This confidence is underpinned by the company's current expectation to report a profit for the full year 2022.

"I am proud of the United team that once again managed to overcome the challenges of the quarter and prioritized high operating reliability for our customers by gradually adding back capacity. Our team continues to do an outstanding job of caring for our customers," said United Airlines CEO Scott Kirby. "The demand environment is the strongest it's been in my 30 years in the industry – and United and its customers will benefit more than any other airline. We're now seeing clear evidence that the second quarter will be an historic inflection point for our business. It leaves me more optimistic than ever about United's future."

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First Quarter Financial Results

• Reported first quarter 2022 capacity down 19% compared to first quarter 2019.

• Reported first quarter 2022 net loss of $1.4 billion, adjusted net loss³ of $1.4 billion.

• Reported first quarter 2022 total operating revenue of $7.6 billion, down 21% compared to first quarter 2019.

• Reported first quarter 2022 TRASM of down 3% compared to first quarter 2019.

• Reported first quarter 2022 Cost Per Available Seat Mile (CASM) of up 21%, and CASM-ex³ of up 18%, compared to first quarter 2019.

• Reported first quarter 2022 operating loss of $1.4 billion, adjusted operating loss³ of $1.4 billion.

• Reported first quarter 2022 fuel price of approximately $2.88 per gallon.

• Reported first quarter 2022 pre-tax margin of negative 23.2%, negative 23.2% on an adjusted³ basis.

• Reported first quarter 2022 ending available liquidity⁴ of $20 billion.

• Reported a decline in total debt of over $700 million.

Operational Performance

• Finished second among mainline carriers for completion for the quarter.

• Achieved best first quarter baggage handling performance in the last 6 years excluding the pandemic.

• Protected 225,000 passengers' trips with ConnectionSaver in Q1.

• Achieved the highest Net Promoter Score (NPS) for inflight satisfaction.

Key Highlights

• Officially opened the United Aviate Academy with the goal of training 5,000 new pilots by 2030.  United is the only major U.S. airline to own a flight training school and the historic inaugural pilot class is 80% women or people of color.

• United Airlines Ventures and Oxy Low Carbon Ventures announced an investment in biotech firm Cemvita Factory to commercialize the production of Sustainable Aviation Fuel intended to be developed through a revolutionary new process using CO₂ and synthetic microbes.
    
• Debuted free "bag drop shortcut" – a simple way for customers at United's U.S. hubs to skip the line, check their bag in a minute or less on average, and get to their flight.

Network

• Announced plans to expand service to one of the world's most popular vacation destinations by offering three nonstop flights per week, year-round, between New York/Newark and Cape Town International Airport, subject to government approval.

• Resumed 19 International routes and relaunched service to six cities not served since the beginning of the pandemic including Berlin; Edinburgh, Scotland; Grand Cayman, Cayman Islands; Porto, Portugal; Singapore; and Shannon, Ireland.

• Completed all United Polaris® lounge re-openings with the addition of San Francisco International Airport and Los Angeles International Airport.

Environmental, Social and Governance (ESG)

• U.S. President Joe Biden announced his intent to appoint United President Brett Hart to the Board of Advisors on Historically Black Colleges and Universities.

• Along with the PGA TOUR, announced that it will award 51 golf teams at Historically Black Colleges and Universities with more than half a million dollars in grants to fund travel for golf tournaments and recruiting efforts.

• The United Aviate Academy announced it aims to potentially quadruple the size of its fleet of training aircraft – adding 25 new, state-of-the-art Cirrus TRAC SR20 aircraft to its current fleet.

• Launched Ukraine relief effort to support flying workers and supplies to areas in need by giving MileagePlus® members the ability to donate cash or miles to United's humanitarian relief partners. To date, more than 31 million miles were donated and over $224,000 raised by MileagePlus members, with an additional approximately 5 million miles and $100,000 matched by United.

• Donated $50,000 to Boulder County Wildfire Relief to support those affected by Colorado wildfires.

• Led Black History Month fundraising campaign – alongside JPMorgan Chase and VISA – supporting Thurgood Marshall College Fund, Leadership Conference Education Fund; NAACP Legal Defense and Education Fund, and United Negro College Fund.

• Through a combination of cargo-only flights and passenger flights, transported approximately 274 million pounds of freight, which includes nearly 41 million pounds of vital shipments, such as medical kits, personal protective equipment, pharmaceuticals and medical equipment in Q1.

UNITED AIRLINES HOLDINGS, INC
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
		Three Months Ended March 31,						% Increase/ (Decrease) 2022 vs. 2019
(In millions, except per share data)		2022		2021		2019
Operating revenue:
Passenger revenue		$     6,348		$     2,316		$         8,725		(27.2)
Cargo		627		497		286		119.2
Other operating revenue		591		408		578		2.2
Total operating revenue		7,566		3,221		9,589		(21.1)
Operating expense:
Salaries and related costs		2,787		2,224		2,873		(3.0)
Aircraft fuel		2,230		851		2,023		10.2
Landing fees and other rent		612		519		588		4.1
Depreciation and amortization		611		623		547		11.7
Regional capacity purchase		565		479		688		(17.9)
Aircraft maintenance materials and outside repairs		407		269		408		(0.2)
Distribution expenses		226		85		360		(37.2)
Aircraft rent		61		55		81		(24.7)
Special charges (credits)		(8)		(1,377)		18		NM
Other operating expenses		1,451		874		1,508		(3.8)
Total operating expense		8,942		4,602		9,094		(1.7)
Operating income (loss)		(1,376)		(1,381)		495		NM
Nonoperating income (expense):
Interest expense		(424)		(353)		(188)		125.5
Interest capitalized		24		17		22		9.1
Interest income		5		7		29		(82.8)
Unrealized gains (losses) on investments, net		—		(22)		17		(100.0)
Miscellaneous, net		19		(19)		(8)		NM
Total nonoperating expense, net		(376)		(370)		(128)		193.8
Income (loss) before income taxes		(1,752)		(1,751)		367		NM
Income tax expense (benefit)		(375)		(394)		75		NM
Net income (loss)		$   (1,377)		$   (1,357)		$            292		NM
Diluted earnings (loss) per share		$      (4.24)		$      (4.29)		$           1.09		NM
Diluted weighted average shares		325.0		316.6		268.3		21.1
NM Not meaningful

 

UNITED AIRLINES HOLDINGS, INC.
PASSENGER REVENUE INFORMATION AND STATISTICS
Information is as follows (in millions, except for percentage changes):
	1Q 2022 Passenger Revenue		Passenger Revenue vs. 1Q 2019		PRASM vs. 1Q 2019		Yield vs. 1Q 2019		Available Seat Miles vs. 1Q 2019		1Q 2022 Available Seat Miles		1Q 2022 Revenue Passenger Miles
Domestic	$            4,510		(16.0%)		(7.2%)		(1.1%)		(9.4%)		33,263		25,780
Latin America	800		(11.7%)		(14.9%)		(4.2%)		3.7%		7,645		5,686
Europe	550		(50.2%)		(27.9%)		(16.1%)		(30.9%)		6,084		3,780
Middle East/India/Africa	261		15.5%		(23.1%)		(17.0%)		50.3%		2,728		2,157
Pacific	227		(79.8%)		(37.5%)		41.5%		(67.6%)		3,544		1,241
International	1,838		(45.3%)		(20.8%)		(3.2%)		(30.8%)		20,001		12,864
Consolidated	$            6,348		(27.2%)		(10.3%)		0.0%		(18.9%)		53,264		38,644

 

Select operating statistics are as follows:
		Three Months Ended March 31,						% Increase/ (Decrease) 2022 vs. 2019
		2022		2021		2019
Passengers (thousands) (a)		29,333		14,674		36,454		(19.5)
Revenue passenger miles ("RPMs") (millions) (b)		38,644		17,248		53,097		(27.2)
Available seat miles ("ASMs") (millions) (c)		53,264		30,370		65,645		(18.9)
Passenger load factor: (d)
Consolidated		72.6%		56.8%		80.9%		(8.3)	pts.
Domestic		77.5%		65.1%		82.6%		(5.1)	pts.
International		64.3%		43.1%		78.7%		(14.4)	pts.
Passenger revenue per available seat mile (cents)		11.92		7.63		13.29		(10.3)
Total revenue per available seat mile ("TRASM") (cents)		14.20		10.61		14.61		(2.8)
Average yield per revenue passenger mile (cents) (e)		16.43		13.43		16.43		—
Cargo revenue ton miles (millions) (f)		791		765		805		(1.7)
Aircraft in fleet at end of period		1,343		1,320		1,348		(0.4)
Average stage length (miles) (g)		1,370		1,282		1,448		(5.4)
Employee headcount, as of March 31 (in thousands) (h)		87.4		84.1		93.0		(6.0)
Average aircraft fuel price per gallon		$     2.88		$     1.74		$   2.05		40.5
Fuel gallons consumed (millions)		775		490		985		(21.3)

(a)  The number of revenue passengers measured by each flight segment flown.

(b)  The number of scheduled miles flown by revenue passengers.

(c)  The number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.

(d)  RPMs divided by ASMs.

(e)  The average passenger revenue received for each revenue passenger mile flown.

(f)   The number of cargo revenue tons transported multiplied by the number of miles flown.

(g)  Average stage length equals the average distance a flight travels weighted for size of aircraft.

(h)  This total includes employees who elected to voluntarily separate from the company but who are still on pre-separation leave of absence with pay and benefits.

 
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