United: Corporate Travel Recovery is ‘TBD’

United Airlines, like its competitors, was challenged late in the fourth quarter by the Covid-19 omicron variant surge coupled with cancellations due to weather and staffing shortages. As a result, near-term demand was affected, and the company has scaled back its upcoming schedule. United, however, plans to ramp up capacity as the year progresses, and “bookings continue to be strong for March and beyond,” said CEO Scott Kirby during the carrier’s fourth-quarter earnings call Thursday. 

Corporate bookings are another matter. Business traffic is “down substantially,” even though it had improved “quite a bit” in the fourth quarter last year, EVP and chief commercial officer Andrew Nocella said. Upcoming corporate travel is “TBD,” he added. “The booking curves are a little bit unreliable from where they will be in two or three or four months from now. We’ll have to wait a little bit longer than that.”

Total overall bookings, however, have shown a “dramatic” comeback during the month of January, Nocella said. During the first week of the month, bookings were down 48 percent versus the same period in 2019. During the second week, they were down 40 percent. In the third week to date, they’re down 25 percent. “We are seeing this really come back very quickly,” he added.

United reported a pre-tax loss of $845 million for the fourth quarter and an adjusted pre-tax loss of $679 million. The carrier for full-year 2021 had a pre-tax loss of $2.6 billion and an adjusted pre-tax loss of $5.8 billion. 

Passenger revenue was $6.9 billion for the quarter, compared with $9.9 billion for the same period in 2019, or a 31 percent decline. Domestic revenue represented 72 percent of that total. Internationally, transatlantic revenue was $937 million, or 49 percent of international revenues, followed by $788 million for Latin America. The Asia-Pacific region continues to lag, and the company anticipates lower capacity in that region for the foreseeable future. Full-year passenger revenue was $20.2 billion, versus $39.6 billion in 2019, representing a 49 percent drop. 

Omicron did “delay the anticipated demand and revenue recovery by a few months.” Nocella said.

Fourth-quarter capacity was down 23 percent compared with the same period in 2019. Full-year capacity was down 37 percent. Total passengers were down 17 percent during the fourth quarter compared with Q4 2019. Full-year passenger count was down 36 percent.

United expects first-quarter total revenue to be 20 percent to 25 percent below the first quarter of 2019, with capacity down between 16 percent and 18 percent compared with the same period. The company also now expects full-year 2022 capacity to be less than 2019, a downgrade from the 5 percent growth it had anticipated in October, Nocella said.

RELATED: United Airlines Q3 earnings

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