CHICAGO: United Airlines Holdings on Wednesday reported a narrower-than-expected fourth-quarter loss, helped by strong holiday travel demand.
The Chicago-based carrier expects revenue in the quarter through March will recover to 75% to 80% of 2019 levels as turbulence caused by the Omicron coronavirus variant depresses near-term demand. However, bookings for the spring and beyond remain strong, it added.
Rival Delta Air Lines last week forecast a current-quarter loss, citing the Omicron variant's impact on travel.
Winter storms and an increase in COVID-19 infections among employees have led to mass flight cancellations. In one day alone, nearly one-third of United's workforce at Newark Liberty International Airport called in sick. Last week, the carrier said 3,000 employees were infected with the virus.
In response, carriers have cut their flight schedules and are offering crew members not scheduled to work incentives to pick up additional shifts and trips.
To ease staffing issues, United is offering its pilots premium pay through the end of the month.
The incentives and flight cancellations are further inflating industry costs, which have gone up in the past year with efforts to ramp up operations.
United said its costs this year are now expected to be higher than in 2019. Earlier, it projected lower costs than in the pre-pandemic year.
Full-year capacity is now projected to be lower than in 2019, compared with a 5% increase estimated earlier. It expects to restore 82% to 84% of pre-pandemic capacity in the current quarter.
The company said its Boeing 777-200 planes equipped with Pratt & Whitney (PW) engines would return to service in the current quarter.
It had to ground the wide-body jets after a United flight to Honolulu suffered an engine failure and made an emergency landing last year in Denver.
On an adjusted basis, the carrier reported a loss of $1.60 per share for the quarter through December, compared with a loss of $7.00 per share a year ago. Analysts surveyed by Refinitiv, on average, had expected a quarterly loss of $2.11 per share.
Fourth-quarter revenue came in at $8.19 billion, compared with $3.4 billion a year ago, beating the consensus estimate of $7.97 billion.
United's shares declined about 2% to $43.51 in extended trading.
The company will discuss the results on a call with analysts and investors on Thursday morning.
(Reporting by Rajesh Kumar Singh; Editing by Richard Chang) ((email@example.com; +1-313-484-5370; Reuters Messaging: firstname.lastname@example.org))