United Airlines on Wednesday notched a key profit milestone in its pandemic recovery, but said it will scale back its growth plans through 2023.
United reported its first quarterly profit — $329 million — since the Covid-19 pandemic began without the help of federal payroll aid, which expired almost a year ago.
Unit revenues in the second quarter surged 24% over 2019 thanks to strong travel demand, even at sky-high fares, while unit costs, excluding fuel, rose 17% over the April-June period of three years ago. Fuel costs also soared.
“It’s nice to return to profitability — but we must confront three risks that could grow over the next 6-18 months,” United CEO Scott Kirby said in an earnings release. “Industry-wide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing.”
The Chicago-based airline estimated its third-quarter capacity would be 85% of the same quarter of 2019 and fourth-quarter capacity would be 90% restored compared with three years ago, before the pandemic hamstrung travel — a relatively conservative plan as it seeks to trim flying in order to become more reliable.
Rival airlines Delta, Southwest, JetBlue and others, have also trimmed their schedules recently.
Next year, United said it plans to expand flying no more than 8% over 2019, down from an earlier forecast for 20% growth.
Shares were down 6% in after-hours trading after the airline reported results.
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