United Airlines has reduced its planned flight capacity for 2022 after the latest wave of the Covid-19 pandemic, caused by the Omicron variant, hit consumer demand.
The carrier said in its fourth quarter earnings release that 2022 started with a reduced flight slate. Planned capacity increases will be delayed until later in the year, with United predicting a 16-18% decline in capacity in the current quarter compared to the first quarter of 2019.
United now expect capacity in 2022 to be “down from 2019”, having forecast three months ago a 5% increase from 2019 levels.
Despite the impact of the latest variant of the coronavirus, the airline relayed confidence regarding spring and summer bookings and did not change its long-term financial targets.
“While Omicron is impacting near-term demand, we remain optimistic for spring and excited for summer and beyond,” said Scott Kirby, Managing Director.
The Chicago-based carrier, the second-largest in the United States, will also begin flying 52 Pratt & Whitney-powered 777s that were previously grounded. This will help bring “the entire airline back to normal use,” management said.
United reported an adjusted net loss of $500 million in the fourth quarter, bringing its adjusted net loss for the full year to $4.5 billion. Fourth-quarter capacity was down 23% from two years ago, before the pandemic began.
Total operating revenue in the fourth quarter was $8.2 billion, down 25% from the same period in 2019. For the year, total operating revenue was $24.63 billion, down 43.1% from 2019’s $43.26 billion.
United’s fourth-quarter cost per available seat mile, an important metric in the aviation industry, was up 13% from two years ago on an adjusted basis. With the company flying fewer available seat miles this year, that adjusted cost per seat mile will “decline significantly,” he said.
The earnings outlook called for a 14-15% increase in cost per available seat mile from the first quarter of 2019, as well as a total of $5.9 billion in total capital spending this year.
United shares were down 2% after hours on Wednesday.