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United’s 4th Quarter Financial Information

Date: January 21, 2022

This week the company reported its 4th Quarter Financial information.  The company stated the surge in COVID-19 infections has hurt bookings in recent weeks and will further delay its recovery from the pandemic.  Expectations are that first-quarter revenue will be 20% to 25% below the same period in 2019.

The company posted a net loss of $646 million, compared with a $641 million profit in the fourth quarter of 2019 but a smaller loss than the $1.9 billion it lost in the same quarter of 2020.

Revenue in the last three months of the year came in at $8.19 billion, off nearly 25% from 2019 but it was its strongest quarter of the pandemic due to an increase in holiday bookings. It was ahead of analysts’ estimates of $7.97 billion.

The company lowered its 2022 growth forecast, saying it would fly less this year than it did three years ago, scrapping its plan to increase capacity by 5% from pre-pandemic levels.

The company stated in its earnings release those bookings for spring travel and beyond "remain strong" despite concerns around the COVID-19 pandemic. The company still plans to ramp up capacity throughout 2022 by ungrounding 52 Boeing 777 aircraft as demand returns.

The company expects to fly fewer available seat miles (ASM) in 2022 compared to 2019. However, the company announced that bookings for spring and summer are strong.

The company stated as travel demand comes back, it is possible, towards the end of the year, the company could get close to or hit 2019 levels of capacity in a given month or quarter but fly fewer ASMs overall in 2022 when compared to 2019. Much of that planning will depend on the return of international long-haul service into Asia and the South Pacific and the overall demand environment. The company also stated that “leisure travel remains a strong booking stream, though the lucrative business travel sector remains down.”

Despite the recent uncertainty caused by the spike in COVID-19 case counts, the company only sees this volatility impacting the near term in January and into February. The company noted that spring travel and beyond remain strong.  With this statement, we are reading the airline remains confident in the long-term plans it outlined under its United Next plan

According to the company, it is good news in that United achieved every major financial guidance target it set in the fourth quarter, setting it up for what it believes will be positive trends in 2022 that will lay the groundwork for reaching its 2023 and beyond financial targets.

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