United Airlines Returns to Profitability

United Airlines has reported its second quarter 2022 financial results today, showing the U.S. mega-carrier achieved the highest second-quarter revenue in its history, delivering its first profitable quarter since COVID-19 began, despite record-high fuel prices. 

The second quarter results combined with continued progress the company is seeing affirms United's confidence in achieving the long-term adjusted pre-tax margin1 targets of approximately 9 percent in 2023 and about 14 percent in 2026 that are part of the United Next strategy.

For the quarter, the company saw operating revenue up 6 percent versus the same quarter in 2019 and expects to see sequential improvement in the third quarter. The company also had record-setting TRASM (Total Revenue Per Available Seat Mile), up 24 percent versus the same quarter in 2019 and expects 24 to 26 percent improvement in the third quarter over third quarter 2019. Second quarter revenue improved at a rapid pace and while the company anticipates the economy will slow in the near to medium term, the continuing pandemic recovery is more than offsetting economic headwinds — leading to expected revenue and earnings acceleration in the third quarter. As a result, the company continues to expect to be profitable for the full year 2022. Additionally, even as the industry faced several, well-documented operational challenges throughout the quarter, United performed well and with the exception of Newark had operating results largely in line with 2019.

"I am grateful to the United team that has fought through severe systemic challenges impacting all of global aviation to serve our customers," said United Airlines CEO Scott Kirby. "It's nice to return to profitability – but we must confront three risks that could grow over the next 6-18 months. Industry-wide operational challenges that limit the system's capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing. These fundamental challenges have already led to higher costs, higher fuel prices but, also higher revenue, which means we're as confident as ever we will deliver on our 9 percent adjusted pre-tax margin target in 2023."

Second Quarter Financial Results

• Reported second quarter 2022 net income of $329 million, adjusted net income² of $471 million.
• Reported second quarter 2022 capacity down 15% compared to second quarter 2019.
• Reported second quarter 2022 total operating revenue of $12.1 billion, up 6% compared to second quarter 2019.
• Reported second quarter 2022 TRASM of up 24% compared to second quarter 2019.
• Reported second quarter 2022 Cost Per Available Seat Mile (CASM) of up 32%, and CASM-ex² of up 17%, compared to second quarter 2019.
• Reported second quarter 2022 operating margin of 7.2%, adjusted operating margin² of 8.2%.
• Reported second quarter 2022 pre-tax margin of 3.8%, adjusted pre-tax margin² of 5.0%.
• Reported second quarter 2022 fuel price of approximately $4.18 per gallon.
• Reported second quarter 2022 payments of long-term debt, finance leases and other financing liabilities of $1.0 billion.
• Reported second quarter 2022 ending available liquidity³ of $22 billion.

Operational Performance

• ConnectionSaver tool helped save more than 150,000 connections, assisting more than 1,600 customers daily on average.
• Inflight satisfaction for on-time flights remained at the highest historic level, achieving 80% for the quarter.
• 700,000 customers used the Agent on Demand platform since the beginning of the year.

Key Highlights

• Launched a new, national advertising campaign – "Good Leads The Way" – that tells the story of United's leadership in areas like customer service, diversity and sustainability, and captures the optimism fueling the airline's large ambitions at a time of unprecedented demand in air travel.
• Announced expansion of its Flight Training Center in Denver, already the largest facility of its kind in the world, as United seeks to hire an additional 10,000 pilots by 2030.
• Became the first airline to donate flights in support of the White House's Operation Fly Formula and transported Kendamil formula free of charge from Heathrow Airport in London to its Washington, Dulles hub.

Customer-Focused Enhancements

• Opened the new United Club^SM location at Newark Liberty International Airport, a 30,000 square foot space offering travelers a modern design, enhanced amenities and culinary offerings.
• Debuted new custom amenity kits for United Polaris^® from Away ahead of summer travel.
• Announced limited-time collaboration with Spritz Society to offer complimentary premium cocktails on flights from Chicago to Milan and Newark to Rome, and in select United Clubs.
• Debuted new plant-based menu items from Impossible Foods as part of United's commitment to add more vegan and vegetarian options to its culinary line-up amidst growing demand for plant-based meat.

Network

• Announced year-round, nonstop service between San Francisco, California, and Brisbane, Australia, becoming the first U.S. airline to add a new transpacific destination to its global network since the start of COVID-19.
• Announced the company's application with the U.S. Department of Transportation (DOT) for three weekly nonstop flights between Washington, D.C., and Cape Town, South Africa. The application was tentatively approved by the DOT earlier this month.
• Resumed nonstop service between San Francisco and Melbourne, Australia.
• Kicked off the launch of the largest transatlantic expansion in United history with 10 new routes including new destinations Amman, Jordan; Bergen, Norway; Nice, France; Ponta Delgada, Portugal; Palma de Mallorca, Spain; and Tenerife, Spain.
• Expanded the airline's codeshare agreement with Star Alliance member Singapore Airlines, making it easier for customers to travel to more cities in the United States, Southeast Asia and other destinations in the Asia-Pacific region.
• Launched a new alliance partnership with Virgin Australia, providing customers new connectivity to Australian cities beyond nonstop services.
• Resumed 24 international routes in the second quarter.
• Announced new three times weekly service between Tokyo, Japan, and Saipan in the Commonwealth of the Northern Mariana Islands beginning in September 2022.

Environmental, Social and Governance (ESG)

• Announced a new collaboration with OneTen, a coalition committed to upskill, hire and advance Black talent into family-sustaining careers over the next 10 years.
• United Airlines Ventures announced an investment in and commercial agreement with Dimensional Energy, another step forward to reaching United's pledge to become 100% green by achieving net-zero greenhouse gas emissions by 2050, without relying on the use of traditional carbon offsets.
• Became the first U.S. airline to sign an agreement with Neste to purchase sustainable aviation fuel overseas.
• United employees and their families participated in 11 different Pride parades in June and July in United hub markets and beyond.
• United employees and their families participated in nearly 20 different Earth Month events across our hub communities and beyond.
• Over 42 million miles and more than $400,000 donated to World Central Kitchen, Airlink, American Red Cross, and Americares in support of Ukraine relief efforts by United's customers, with an additional 5 million miles and $100,000 matched by United.
• Hosted send-off events for more than 350 athletes and their families flying to the 2022 USA Special Olympics Games in Orlando, Florida, including a fellow O'Hare International Airport Special Olympics Service Ambassador.
• United welcomed 50 local youths and their family members to its Los Angeles International Airport maintenance facility for a three-week aviation program.
• Sponsored the "Girls Rock Wings" event with Sisters of the Skies, allowing more than 60 young Black women, ages 10-18, to envision a future in aviation.
• United, in partnership with the Warriors Community Foundation and Good Tidings Foundation, revealed the newly refurbished basketball court and gymnasium at the Willie Mays Boys and Girls Club of San Francisco.
• In the second quarter, through a combination of cargo-only and passenger flights, United transported approximately 275 million pounds of freight, including COVID-19 vaccines and other essential supplies, which included nearly 33 million pounds of vital shipments, such as medical kits, personal protective equipment, pharmaceuticals, and medical equipment.

UNITED AIRLINES HOLDINGS, INC STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
		Three Months Ended June 30,						% Increase/ (Decrease) 2022 vs. 2019			Six Months Ended June 30,						% Increase/ (Decrease) 2022 vs. 2019
(In millions, except per share data)		2022		2021		2019					2022		2021		2019
Operating revenue:
Passenger revenue		$  10,829		$    4,366		$  10,486		3.3			$ 17,177		$   6,682		$ 19,211		(10.6)
Cargo		574		606		295		94.6			1,201		1,103		581		106.7
Other operating revenue		709		499		621		14.2			1,300		907		1,199		8.4
Total operating revenue		12,112		5,471		11,402		6.2			19,678		8,692		20,991		(6.3)
Operating expense:
Salaries and related costs		2,836		2,276		3,057		(7.2)			5,623		4,500		5,930		(5.2)
Aircraft fuel		3,811		1,232		2,385		59.8			6,041		2,083		4,408		37.0
Landing fees and other rent		668		564		660		1.2			1,280		1,083		1,248		2.6
Depreciation and amortization		611		620		560		9.1			1,222		1,243		1,107		10.4
Regional capacity purchase		567		547		715		(20.7)			1,132		1,026		1,403		(19.3)
Aircraft maintenance materials and outside repairs		527		302		421		25.2			934		571		829		12.7
Distribution expenses		393		139		442		(11.1)			619		224		802		(22.8)
Aircraft rent		67		52		73		(8.2)			128		107		154		(16.9)
Special charges (credits)		112		(948)		71		NM			104		(2,325)		89		NM
Other operating expenses		1,642		957		1,546		6.2			3,093		1,831		3,054		1.3
Total operating expense		11,234		5,741		9,930		13.1			20,176		10,343		19,024		6.1
Operating income (loss)		878		(270)		1,472		(40.4)			(498)		(1,651)		1,967		NM
Nonoperating income (expense):
Interest expense		(420)		(426)		(191)		119.9			(844)		(779)		(379)		122.7
Interest capitalized		22		22		21		4.8			46		39		43		7.0
Interest income		33		12		38		(13.2)			38		19		67		(43.3)
Unrealized gains (losses) on investments, net		(40)		147		34		NM			(40)		125		51		NM
Miscellaneous, net		(14)		(49)		(20)		(30.0)			5		(68)		(28)		NM
Total nonoperating expense, net		(419)		(294)		(118)		255.1			(795)		(664)		(246)		223.2
Income (loss) before income taxes		459		(564)		1,354		(66.1)			(1,293)		(2,315)		1,721		NM
Income tax expense (benefit)		130		(130)		302		(57.0)			(245)		(524)		377		NM
Net income (loss)		$      329		$     (434)		$    1,052		(68.7)			$  (1,048)		$  (1,791)		$   1,344		NM
Diluted earnings (loss) per share		$     1.00		$    (1.34)		$      4.02		(75.1)			$    (3.22)		$    (5.60)		$     5.07		NM
Diluted weighted average shares		330.3		323.6		261.6		26.3			325.9		320.1		264.9		23.0
NM Not meaningful

 

UNITED AIRLINES HOLDINGS, INC. PASSENGER REVENUE INFORMATION AND STATISTICS
Information is as follows (in millions, except for percentage changes):
	2Q 2022 Passenger Revenue		Passenger Revenue vs. 2Q 2019		PRASM vs. 2Q 2019		Yield vs. 2Q 2019		Available Seat Miles vs. 2Q 2019		2Q 2022 Available Seat Miles		2Q 2022 Revenue Passenger Miles
Domestic	$          7,154		9.3 %		24.8 %		21.5 %		(12.4 %)		36,324		32,654
Europe	1,843		7.4 %		5.2 %		6.1 %		2.1 %		12,729		10,582
Latin America	1,075		22.6 %		13.5 %		12.8 %		8.0 %		7,441		6,416
Pacific	428		(62.3 %)		15.2 %		42.3 %		(67.3 %)		3,519		2,354
Middle East/India/Africa	329		55.9 %		(1.2 %)		(1.7 %)		57.8 %		2,592		2,296
International	3,675		(6.7 %)		12.7 %		15.0 %		(17.2 %)		26,281		21,648
Consolidated	$        10,829		3.3 %		20.8 %		19.8 %		(14.5 %)		62,605		54,302

Select operating statistics are as follows:
		Three Months Ended June 30,						% Increase/ (Decrease) 2022 vs. 2019			Six Months Ended June 30,						% Increase/ (Decrease) 2022 vs. 2019
		2022		2021		2019					2022		2021		2019
Passengers (thousands) (a)		37,923		23,909		42,592		(11.0)			67,256		38,583		79,046		(14.9)
Revenue passenger miles ("RPMs") (millions) (b)		54,302		28,514		63,001		(13.8)			92,946		45,762		116,098		(19.9)
Available seat miles ("ASMs") (millions) (c)		62,605		39,613		73,240		(14.5)			115,869		69,983		138,885		(16.6)
Passenger load factor: (d)
Consolidated		86.7 %		72.0 %		86.0 %		0.7	pts.		80.2 %		65.4 %		83.6 %		(3.4)	pts.
Domestic		89.9 %		83.3 %		87.5 %		2.4	pts.		84.0 %		75.4 %		85.2 %		(1.2)	pts.
International		82.4 %		53.2 %		84.0 %		(1.6)	pts.		74.6 %		48.8 %		81.5 %		(6.9)	pts.
Passenger revenue per available seat mile (cents)		17.30		11.02		14.32		20.8			14.82		9.55		13.83		7.2
Total revenue per available seat mile ("TRASM") (cents)		19.35		13.81		15.57		24.3			16.98		12.42		15.11		12.4
Average yield per revenue passenger mile (cents) (e)		19.94		15.31		16.64		19.8			18.48		14.60		16.55		11.7
Cargo revenue ton miles (millions) (f)		752		892		831		(9.5)			1,543		1,657		1,636		(5.7)
Aircraft in fleet at end of period		1,323		1,315		1,344		(1.6)			1,323		1,315		1,344		(1.6)
Average stage length (miles) (g)		1,432		1,309		1,469		(2.5)			1,403		1,297		1,459		(3.8)
Employee headcount, as of June 30 (in thousands) (h)		91.2		84.4		94.6		(3.6)			91.2		84.4		94.6		(3.6)
Average aircraft fuel price per gallon		$ 4.18		$ 1.97		$ 2.16		93.5			$ 3.58		$ 1.87		$ 2.11		69.7
Fuel gallons consumed (millions)		912		625		1,102		(17.2)			1,687		1,115		2,087		(19.2)

(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 benefit