United Airlines Holdings Inc. expects the coronavirus resurgence to delay a recovery in business travel this year, slowing the carrier’s momentum after a robust holiday season pushed its fourth-quarter results above Wall Street’s estimates.
The spreading Omicron variant also prompted United to lower its capacity forecast for 2022 to below the 2019 level, according to a statement Wednesday detailing quarterly results. The airline previously said it expected this year’s capacity to surpass 2019 by five per cent.
The surge in new infections has upended multiple industries and forced many employees to work from home, hurting business travel that’s a staple of United’s franchise. The Chicago-based company’s views on the delayed rebound echo comments last week from rival Delta Air Lines Inc.
“While Omicron is impacting near-term demand, we remain optimistic about the spring and excited about the summer and beyond,” Chief Executive Officer Scott Kirby said in the statement.
The reduced capacity also complicates United’s efforts to lower its non-fuel unit costs to below 2019, a target it laid out for investors last year.
United shares fell 1.9 per cent after the close of regular trading in New York.
The carrier reported a loss of US$1.60 a share for the final three months of 2021 on an adjusted pretax basis, extending a string of pandemic-driven losses to the eighth consecutive quarter. Still, that was better than US$2.11 loss expected by analysts, according to the average of estimates compiled by Bloomberg. Revenue was US$8.19 billion, while analysts expected US$7.95 billion.
Unit costs excluding fuel rose 13 per cent compared to the fourth quarter of 2019, the last year before the pandemic battered the airline industry. United sees that measure rising 14 per cent to 15 per cent in the first quarter related to strategic schedule cuts the airline is making to adjust to reduced staffing. United was among multiple airlines hobbled during the holiday travel peak by employees being out sick.
For the first quarter, United expects capacity to be as much as 84 per cent of the 2019 level.
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