United Airlines: Since many prominent companies are experiencing the effects of inflation, profit is difficult to estimate.
Due to the growing need for travel, United Airlines has a great prospect, while other firms are still considering their outlook for 2023.
First-half and fourth-quarter forecasts for the major airline both exceeded Wall Street projections.
The positive news might be attributed to increased prices and surging demand for travel.
Airlines are again profitable due to customer demand for air travel and readiness to pay more.
The cost of building out networks, including personnel, fuel, and other fees, has dramatically decreased due to the increased demand for air travel.
The rise of airlines has also been limited by aircraft backlogs and delays, which has raised ticket costs.
United Airlines earned $843 million on $12.4 billion in revenue in the last quarter of 2022, a 31% rise over the same period in the previous three months.
9% fewer flights were taken, but there were around 14% greater revenues than at the same time in 2019.
Even though unit costs increased by 21% from 2020, the revenue helped the airline make a profit.
Only 2% of United Airlines’ stock price rose during Tuesday’s extended session.
The quarterly update is another optimistic sign that airlines will end the year well, despite the winter storms and delays during the critical holiday travel season.
United, one of many major airlines, is bound for a prosperous year.
Last week, Delta Air Lines’ revenue and earnings exceeded Wall Street’s projections.
Its predicted first-quarter profitability, however, is outweighed by a more considerable expenditure brought on by an unforeseen pilot labor agreement.
American Airlines boosted both its profit and sales forecasts for the fourth quarter.
There will be a report made public on January 26.
Read also: Prices of 2022: the highs and lows
Refinitiv combined consensus expectations with seeing how United Airlines performed in the fourth quarter.
- Adjusted earnings per share: $2.46
- Total revenue: $12.4 billion
These projections come from Wall Street.
- Adjusted earnings per share: $2.10
- Total revenue $12.2 billion
United Airlines predicts that its revenue from January through March 2023 will increase by 50% compared to the same period last year.
Additionally, the airline projects between 50 cents and $1 in earnings per share for the first quarter.
According to Refinitiv, it exceeds the 25-cent analyst estimate.
Compared to the same period last year, United Airlines anticipates a 20% rise in flight traffic in the first quarter.
The airlines predict a capacity increase in the high teens for the whole year compared to 2022.
As a result of the same unit revenues (revenue per available seat mile) as in 2022, the analysis assumes that the steep price increase may continue to level out when airlines add more flights.
In a presentation to investors, United said that a shortage of pilots, outdated technology, and labor issues would constrain the industry’s capacity.
Even though the aviation industry continues to have a labor shortage brought on by Covid, several airlines have plans to boost the number of pilots and crew members they hire this fiscal year.
United Airlines revealed on Tuesday that the Calibrate apprenticeship program and the United Aviate Academy started in November and early 2022, respectively.
A greatly updated and expanded flight attendant training facility has opened in Houston, according to the airline.
A new labor deal between United and its pilots has not yet been reached.
A proposed salary increase agreement between Delta and the pilots has not been ratified by their union.
United pilot union
United Airlines’ pilots union is preparing to elect a new head after the former one resigned.
CEO Scott Kirby predicts that the election will be concluded this month.
Kirby anticipates that when the new head is selected, negotiations will commence again around February 7.
He insisted that an agreement for a pilot contract ought to be finished right away.
To maintain non-fuel cost above the prior year, United noted in its investor presentation that it anticipated new agreements with pilots, flight attendants, technicians, and airport workers.
According to Scott Kirby, the most recent system breakdown at the Federal Aviation Administration is a case study showing how the industry’s supply constraints are a symptom of a bigger infrastructural problem.
He said that the FAA’s use of space and drones was taxing the resources typically utilized to maintain aviation infrastructure.
“They’ve had to rob Peter to pay Paul,” said Kirby. “They just don’t have enough resources.”
Kirby added that he travels to Washington, DC, twice a month to advocate for increased funding.