United Airlines (UAL) earnings in the fourth quarter of 2022

United AirlinesFourth-quarter earnings and the outlook for early 2023 beat Wall Street estimates thanks to strong travel demand and higher fares.

Consumers’ appetite for air travel and their willingness to pay higher fares has helped airlines return to profitability despite higher fuel, labor and other expenses associated with backing up their networks. Meanwhile, delays in aircraft deliveries and a training backlog have constrained the airlines’ growth, Maintain high prices.

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United announced a profit of $843 million for the last three months of 2022, an increase of 31% compared to three previous years, on revenues of $12.4 billion. Those revenues were about 14% higher than the same period in 2019, before the pandemic, though down 9%, which helped it turn a profit despite unit costs increasing 21% from three years earlier.

United shares were up about 2% in extended Tuesday trading.

The quarterly update is another sign of a strong end to the year for airlines, despite severe winter storms and disruptions during the popular holiday travel period.

last week, Delta AirlinesEarnings and revenue beat Wall Street expectations though higher costs, due in part to an expected trial labor deal, weighed on the first-quarter earnings outlook. also last week, American Airlineswhich reports on January 26, raised its earnings and sales forecasts for the fourth quarter.

Here’s how United fared The fourth quarter Compared to what Wall Street predicted, based on average estimates compiled by Refinitiv:

  • Adjusted earnings per share: $2.46 vs. $2.10 expected
  • Total revenue: 12.4 billion dollars, compared to the expected 12.2 billion dollars

For the first three months of 2023, United expects revenue to be 50% higher than for the same period in 2022. It expects first-quarter earnings per share to be between 50 cents and $1, above the analyst consensus of 25 cents, according to Refinitiv.

United said in a statement that it expects to expand its aviation range by 20% in the first quarter of last year.

It expects capacity growth for high-level teens for the full year above 2022. It expects unit revenue, or revenue per available seat mile, for the full year to be flat compared to 2022, a sign that the sharp rise in airfares this year could be flat compared to last year. 2022. Continued decline as airlines add more flights again.

United also said in Investor Presentation Employment problems, aircraft shortages and outdated technology will limit the industry’s capacity this year.

As the airline industry grapples with a labor shortage caused by the Covid virus, United and others are hoping to boost pilot and crew numbers in the next fiscal year. On Tuesday, the airline marked the debut of its Calibrate vocational training program, which it launched in November, and its United Aviate Academy, which will begin in early 2022. The airline also said Tuesday it opened a renovated and expanded flight attendant training facility in Houston.

United has not yet reached a new working agreement with its pilots. Delta and its pilots’ union have reached a tentative agreement on the significant increases, but the pilots have yet to vote on them.

CEO Scott Kirby told CNBC “quick money” The airline pilots union is working to elect a new leader following the resignation of its most recent president, which is set to be finalized later this month. Once a new leader has been chosen, Kirby expects to resume negotiations, which he estimates will be by February 7th.

He said that agreement on a trial contract “has to be done very quickly once we get back to the negotiating table”.

United said in its presentation to investors that it expects to enter into new contracts with pilots, flight attendants, technicians and airport staff to keep non-fuel costs constant through 2022.

Kirby also said supply constraints in the industry reflect a broader infrastructure issue, which has been brought to light recently FAA system outage. He said the FAA’s expansion into space and drones has strained the resources it would normally use to support aviation infrastructure.

“They had to rob Peter to pay Paul,” Kirby said. “They don’t have enough resources.”

Twice a month, Kirby said, he’s in Washington, D.C., lobbying for more resources.

United executives will hold a call with analysts and the media at 10:30 a.m. ET on Wednesday.

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