United forecasts a 2022 profit as passengers return and pay more to fly

United Airlines expects to turn a profit in 2022 for the first time since before the pandemic as bookings and airfares jump.

United’s shares rose more than 4% in after-hours trading Wednesday after releasing results.

United’s first-quarter revenue came in at $7.57 billion, well off the $9.59 billion it reported three years earlier but more than double the $3.22 billion from a year ago.

Adjusting for one-time items, it posted a loss of $4.24 per share. The company paid $2.88 a gallon for fuel in the first quarter, up from $2.05 in 2019 and $1.74 last year. Excluding fuel, its costs jumped 18% over the same period of 2019.

For the second quarter, United is forecasting a 10% operating margin, and costs, excluding fuel, up 16% and revenue per passenger mile up 17%, with higher fares helping cover increase in expenses.

The Chicago-based airline is the second major U.S. carrier to report results and provide an outlook for the peak spring and summer travel season, when airlines generate the bulk of their annual revenue. Delta Air Lines last week reiterated that it foresees a return to profitability this year.

Here’s how United performed in the first quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

• Adjusted earnings per share: a loss of $4.24 versus an expected loss of $4.22

• Total revenue: $7.57 billion versus expected $7.68 billion.

Despite strong demand, United is challenged to add capacity. Its 52 Pratt & Whitney-powered Boeing 777s, some of the biggest planes in its fleet, which have been grounded since an engine failure in February 2021, won’t return until mid-May at the earliest, CNBC reported earlier this month. And deliveries of new Boeing 787 Dreamliners have been suspended for much of the past 18 months because of manufacturing flaws.

The airline is also facing a pilot shortage, particularly at regional carriers that feed its hubs, a problem across the sector.

Airline bookings, broadly, surged after Covid cases peaked and then subsided this winter, easing the rocky start to 2022 that carriers faced. Airline executives expect that after more than two years of pandemic, many travelers who were cooped up will continue to fuel travel demand, even though fares have climbed.

United plans to fly 87% of its 2019 schedule during the second quarter. Along with Delta, United has been more cautious on adding capacity compared with rivals like American Airlines and fast-growing budget airlines like Spirit Airlines.

Some carriers, however, like Spirit, Alaska Airlines and JetBlue Airways are trimming spring and summer schedules for wiggle room to navigate disruptions like bad weather or staffing shortages.

American Airlines’ new CEO Robert Isom told staff last week that reliability is paramount this season. Customers on American and other carriers faced massive deals and cancellations last year after carriers struggled with routine disruptions and staffing shortfalls.

United executives will discuss results with analysts and media on a 10:30 a.m. ET call Thursday. American Airlines will report its results before the market opens Thursday and hold a call at 8:30 a.m. ET.

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