United Airlines says its third quarter financial results solidly beat expectations

United Airlines today reported third-quarter 2022 financial results, beating expectations on top-line operating revenue, unit costs and adjusted operating margin¹. As a result, the company achieved operating revenue growth of 13.2% versus the third quarter 2019, with a 25.5% TRASM improvement in the quarter versus 2019, while CASM-ex1 (cost per available seat mile) came in better than expected, resulting in 11.3% operating margin; 11.5% operating margin on an adjusted basis1.

Looking forward through the end of the year, the airline expects the strong COVID recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment. The airline now expects the fourth-quarter adjusted operating margin to be above 2019 for the first time. The company also remains confident in the 2023 United Next adjusted pre-tax margin¹ target of ~9%. 

The company believes there are three durable trends for air travel demand that are more than fully offsetting any economic headwinds: air travel is still in the COVID recovery phase, hybrid work gives customers the freedom and flexibility to travel for leisure more often, and external supply challenges will limit industry supply for years to come.

United delivered one of its best third-quarter operational performances of any third quarter in the company's history, outside of 2020. In addition, the company saved more than 135,000 customer connections with its industry-leading tool, ConnectionSaver.

"I am grateful to United employees who delivered an incredible performance this quarter taking care of our customers and producing, by most metrics, the best operational quarter in our history," said United Airlines CEO Scott Kirby. "Despite growing concerns about an economic slowdown, the ongoing COVID recovery trends at United continue to prevail and we remain optimistic that we'll continue to deliver strong financial results in the fourth quarter, 2023 and beyond."

Third Quarter Financial Results

• Reported third quarter 2022 net income of $942 million, adjusted net income¹ of $927 million.
• Reported third quarter 2022 capacity down 9.8% compared to third quarter 2019.
• Reported third quarter 2022 total operating revenue of $12.9 billion, up 13.2% compared to third quarter 2019.
• Reported third quarter 2022 TRASM of up 25.5% compared to third quarter 2019.
• Reported third quarter 2022 CASM of up 27.8%, and CASM-ex¹ of up 14.5%, compared to third quarter 2019.
• Reported third quarter 2022 operating margin of 11.3%, adjusted operating margin¹ of 11.5%.
• Reported third quarter 2022 pre-tax margin of 9.0%, adjusted pre-tax margin¹ of 8.9%.
• Reported third quarter 2022 fuel price of $3.81 per gallon.
• Reported third-quarter 2022 payments of long-term debt, finance leases and other financing liabilities of $810 million.
• Reported third quarter 2022 ending available liquidity² of $20.4 billion.

Key Highlights

• Achieved best on-time arrival rate for any Q3 in history (outside 2020).
• Announced a historic commercial agreement with Emirates that will enhance each airline's network and give customers easier access to hundreds of destinations around the world. Also announced a new direct flight between Newark/New York and Dubai beginning in March 2023, subject to government approval.
• Unveiled a brand-new United Club^SM in Terminal 3 at Phoenix Sky Harbor International Airport.
• Announced a $15 million investment in Eve Air Mobility and a conditional purchase agreement for 200 four-seat electric aircraft plus 200 options, expecting the first deliveries as early as 2026.
• Launched United for Business Blueprint™ a new platform that will allow corporate customers to fully customize their business travel program contracts with United.
• Added more than 120 flights for college football fans to see their team on the road.
• Began offering eligible T-Mobile customers free in-flight Wi-Fi and streaming where available on select domestic and short-haul international flights.

 Customer Experience and Operational Performance

• Achieved a nearly 5-point improvement in customer satisfaction as measured by Net Promoter Score over the second quarter of 2022.
• Close to 39 million customers travelled with United in the quarter, 90% of the volume for the same quarter in 2019.
• Among top carriers, United was the only carrier to outperform the third-quarter of 2019 in on-time departure and on-time arrival performance.
• Controllable cancellations decreased by 95% in September, compared to January. Controllable cancellations are measured as cancellations that are in control of the airline, such as maintenance.
• Achieved third-best completion factor for the month of September with a 99% completion rate. This was despite the impacts of Hurricane Ian.

Network

• Announced a joint business agreement with Air Canada for the Canada-U.S. transborder market, building on the companies' long-standing alliance, that will give more flight options and better flight schedules to customers travelling between the two countries.
• Announced new direct flights between Washington Dulles Airport and Cape Town beginning Nov. 17, 2022, subject to government approval, becoming the first airline to provide nonstop round trip service from the U.S. capital to South Africa.
• Reintroduced five international routes for the first time since the start of the pandemic: Chicago to Edinburgh, Scotland; San Francisco to Tokyo-Haneda, Japan; and Guam to Fukuoka, Osaka, and Nagoya, Japan.

Environmental, Social and Governance (ESG)

• Hosted 600 girls and young women at 22 events as part of Girls in Aviation Day where attendees got a behind-the-scenes look at careers in aviation.
• Launched "Game Recognize Game," in partnership with the PGA Tour and hosted by Roger Steele, a video series that features student-athletes and coaches from golf programs at four Historically Black Colleges and Universities (HBCUs) who discuss the positive impact of United's travel grant program.
• Recognized in the ESG category for Flight Global's annual Airline Strategy Awards.
• Earned a top score of 100% on the 2022 Disability Equality Index (DEI) for the seventh consecutive year and was recognized as a "Best Place to Work" for Disability Inclusion.
• Partnered with the Los Angeles Memorial Coliseum and the University of Southern California (USC) to launch the United Airlines - LA Memorial Coliseum Veteran Small Business Grant Program, which will award $100,000 to veteran-owned small businesses in the fourth quarter.
• Hosted more than 100 volunteer events for United's 2nd Annual September of Service with more than 1,600 United employees volunteering 6,500 hours.
• Launched a relief campaign for those affected by Hurricanes Fiona and Ian with customers donating over 3 million miles and $36,630 in cash contributions so far for participating organizations.
• Commemorated 85 years of service in Denver by doing good in the community including hosting students from the Aviation Career Education (ACE) Academy and holding a school supply drive for kids in need.
• Through a combination of cargo-only flights and passenger flights, United transported nearly 250 million pounds of cargo, including approximately 20 million pounds of medical shipments, 480,000 pounds of COVID-related shipments, and 900 pounds of military shipments.

UNITED AIRLINES HOLDINGS, INC
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
		Three Months Ended September 30,						% Increase/ (Decrease) 2022 vs. 2019			Nine Months Ended September 30,						% Increase/ (Decrease) 2022 vs. 2019
(In millions, except per share data)		2022		2021		2019					2022		2021		2019
Operating revenue:
Passenger revenue		$  11,653		$    6,637		$  10,481		11.2			$ 28,830		$ 13,319		$ 29,692		(2.9)
Cargo		498		519		282		76.6			1,699		1,622		863		96.9
Other operating revenue		726		594		617		17.7			2,026		1,501		1,816		11.6
Total operating revenue		12,877		7,750		11,380		13.2			32,555		16,442		32,371		0.6
Operating expense:
Aircraft fuel		3,755		1,710		2,296		63.5			9,796		3,793		6,704		46.1
Salaries and related costs		2,843		2,487		3,063		(7.2)			8,466		6,987		8,993		(5.9)
Landing fees and other rent		639		652		645		(0.9)			1,919		1,735		1,893		1.4
Aircraft maintenance materials and outside repairs		619		346		490		26.3			1,553		917		1,319		17.7
Depreciation and amortization		610		623		575		6.1			1,832		1,866		1,682		8.9
Regional capacity purchase		596		520		721		(17.3)			1,728		1,546		2,124		(18.6)
Distribution expenses		482		218		432		11.6			1,101		442		1,234		(10.8)
Aircraft rent		65		58		67		(3.0)			193		165		221		(12.7)
Special charges (credits)		20		(1,098)		27		NM			124		(3,423)		116		NM
Other operating expenses		1,790		1,197		1,591		12.5			4,883		3,028		4,645		5.1
Total operating expense		11,419		6,713		9,907		15.3			31,595		17,056		28,931		9.2
Operating income (loss)		1,458		1,037		1,473		(1.0)			960		(614)		3,440		(72.1)
Nonoperating income (expense):
Interest expense		(455)		(449)		(191)		138.2			(1,299)		(1,228)		(570)		127.9
Interest capitalized		27		18		22		22.7			73		57		65		12.3
Interest income		104		11		36		188.9			142		30		103		37.9
Unrealized gains (losses) on investments, net		28		(34)		21		33.3			(12)		91		72		NM
Miscellaneous, net		(9)		20		(12)		(25.0)			(4)		(48)		(40)		NM
Total nonoperating expense, net		(305)		(434)		(124)		146.0			(1,100)		(1,098)		(370)		197.3
Income (loss) before income taxes		1,153		603		1,349		(14.5)			(140)		(1,712)		3,070		NM
Income tax expense (benefit)		211		130		325		(35.1)			(34)		(394)		702		NM
Net income (loss)		$      942		$      473		$    1,024		(8.0)			$    (106)		$ (1,318)		$   2,368		NM
Diluted earnings (loss) per share		$     2.86		$     1.44		$     3.99		(28.3)			$   (0.33)		$   (4.10)		$     9.04		NM
Diluted weighted average shares		329.5		329.0		256.4		28.5			326.2		321.3		262.0		24.5
NM Not meaningful

 

 

UNITED AIRLINES HOLDINGS, INC.
PASSENGER REVENUE INFORMATION AND STATISTICS
Information is as follows (in millions, except for percentage changes):
	3Q 2022 Passenger Revenue		Passenger Revenue vs. 3Q 2019		PRASM vs. 3Q 2019		Yield vs. 3Q 2019		Available Seat Miles vs. 3Q 2019		3Q 2022 Available Seat Miles		3Q 2022 Revenue Passenger Miles
Domestic	$          7,057		7.7 %		20.4 %		19.7 %		(10.5 %)		38,176		33,223
Europe	2,494		39.8 %		22.7 %		19.6 %		14.0 %		15,613		13,916
Latin America	1,053		24.9 %		20.1 %		17.7 %		4.0 %		6,582		5,768
Pacific	646		(42.4 %)		41.4 %		43.5 %		(59.2 %)		4,428		3,630
Middle East/India/Africa	403		125.1 %		18.2 %		15.4 %		90.7 %		2,896		2,550
International	4,596		17.0 %		28.5 %		25.3 %		(8.9 %)		29,519		25,864
Consolidated	$        11,653		11.2 %		23.3 %		21.6 %		(9.8 %)		67,695		59,087

 

Select operating statistics are as follows:
		Three Months Ended September 30,						% Increase/ (Decrease) 2022 vs. 2019			Nine Months Ended September 30,						% Increase/ (Decrease) 2022 vs. 2019
		2022		2021		2019					2022		2021		2019
Passengers (thousands) (a)		38,802		32,145		43,091		(10.0)			106,058		70,728		122,137		(13.2)
Revenue passenger miles ("RPMs") (millions) (b)		59,087		41,031		64,629		(8.6)			152,033		86,793		180,727		(15.9)
Available seat miles ("ASMs") (millions) (c)		67,695		53,886		75,076		(9.8)			183,564		123,869		213,961		(14.2)
Passenger load factor: (d)
Consolidated		87.3 %		76.1 %		86.1 %		1.2	pts.		82.8 %		70.1 %		84.5 %		(1.7)	pts.
Domestic		87.0 %		82.4 %		86.6 %		0.4	pts.		85.1 %		78.5 %		85.7 %		(0.6)	pts.
International		87.6 %		65.2 %		85.4 %		2.2	pts.		79.7 %		55.8 %		82.9 %		(3.2)	pts.
Passenger revenue per available seat mile (cents)		17.21		12.32		13.96		23.3			15.71		10.75		13.88		13.2
Total revenue per available seat mile ("TRASM") (cents)		19.02		14.38		15.16		25.5			17.73		13.27		15.13		17.2
Average yield per revenue passenger mile (cents) (e)		19.72		16.18		16.22		21.6			18.96		15.35		16.43		15.4
Cargo revenue ton miles (millions) (f)		733		758		804		(8.8)			2,276		2,415		2,440		(6.7)
Aircraft in fleet at end of period		1,320		1,338		1,348		(2.1)			1,320		1,338		1,348		(2.1)
Average stage length (miles) (g)		1,499		1,334		1,473		1.8			1,437		1,313		1,464		(1.8)
Employee headcount, as of September 30 (in thousands)		90.8		85.3		95.0		(4.4)			90.8		85.3		95.0		(4.4)
CASM (cents)		16.87		12.46		13.20		27.8			17.21		13.77		13.52		27.3
CASM-ex (cents) (h)		11.22		11.26		9.80		14.5			11.74		13.40		10.11		16.1
Average aircraft fuel price per gallon		$ 3.81		$ 2.14		$ 2.02		88.6			$ 3.67		$ 1.98		$ 2.08		76.4
Fuel gallons consumed (millions)		985		800		1,134		(13.1)			2,672		1,915		3,221		(17.0)

(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)	See NON-GAAP FINANCIAL INFORMATION for the definition of CASM-ex and reconciliations of CASM-ex to CASM, the most comparable GAAP measure.