United Airlines, like its competitors, was challenged late in the fourth quarter by the Covid-19 omicron variant surge coupled with cancellations due to weather and staffing shortages.
As a result, near-term demand was affected, and the company has scaled back its upcoming schedule.
United, however, plans to ramp up capacity as the year progresses, and "bookings continue to be strong for March and beyond," said CEO Scott Kirby during the carrier's fourth-quarter earnings call Thursday.
Corporate bookings are another matter. Business traffic is "down substantially," even though it had improved "quite a bit" in the fourth quarter last year, chief commercial officer Andrew Nocella said. Upcoming corporate travel is "TBD," he added.
"The booking curves are a little bit unreliable from where they will be in two or three or four months from now," Nocella said. "We'll have to wait a little bit longer than that."
Total overall bookings, however, have shown a "dramatic" comeback during the month of January, Nocella said.
During the first week of the month, bookings were down 48% versus the same period in 2019. During the second week, they were down 40%. In the third week to date, they're down 25%.
"We are seeing this really come back very quickly," he said.
United loses $2.6 billion in 2021
United reported a pre-tax loss of $845 million for the fourth quarter and an adjusted pre-tax loss of $679 million.
The carrier for full-year 2021 had a pre-tax loss of $2.6 billion and an adjusted pre-tax loss of $5.8 billion. The adjusted loss does not include the federal payroll aid that United received last year from the Treasury Department.
Passenger revenue was $6.9 billion for the quarter, compared with $9.9 billion for the same period in 2019, or a 31% decline. Domestic revenue represented 72% of that total.
Internationally, transatlantic revenue was $937 million, or 49% of international revenue, followed by $788 million for Latin America.
The Asia-Pacific region continues to lag, and the company anticipates lower capacity in that region for the foreseeable future.
Full-year passenger revenue was $20.2 billion, versus $39.6 billion in 2019, a 49% drop.
Omicron did "delay the anticipated demand and revenue recovery by a few months." Nocella said.
Fourth-quarter capacity was down 23% compared with the same period in 2019. Full-year capacity was down 37%. Total passengers were down 17% during the fourth quarter compared with Q4 2019. Full-year passenger count was down 36%.
United expects first-quarter total revenue to be 20-25% below the first quarter of 2019, with capacity down 16-18% compared.
The company also now expects full-year 2022 capacity to be less than 2019, a downgrade from the 5% growth it had anticipated last October, Nocella said.
Source: Business Travel News