United Airlines (UAL) today reported first-quarter 2023 financial results. The company reported a $256 million pre-tax loss, consistent with expectations provided in March. The company grew total operating revenue by 51.1% compared to first quarter 2022 and total revenue per available seat mile (TRASM) by 22.5%. Cost per available seat mile (CASM) increased 4.0%, while CASM-ex2 came in at down 0.1%, better than guidance due to strong operational reliability that produced available seat miles (ASMs) 23.4% higher than the first quarter of 2022. The company remains confident in the 2023 United Next adjusted diluted earnings per share1 target of $10 to $12.
“I am extremely proud of the United team’s performance during the first quarter of 2023. Our industry-leading operational performance contributed to an all-time high operating cash flow in the first quarter and keeps us on track to achieve our cost targets for the full year,” said United Airlines CEO Scott Kirby. “We are watching the macroeconomic risks carefully, but demand remains strong, especially internationally, where we are growing at twice the domestic rate. We expect all of these factors will keep us on track to achieve our full-year adjusted diluted EPS1 target.”
First-Quarter Financial Results
Net loss of $194 million, adjusted net loss3 of $207 million.
Capacity up 23.4% compared to first-quarter 2022.
Total operating revenue of $11.4 billion, up 51.1% compared to first-quarter 2022.
TRASM up 22.5% compared to first-quarter 2022.
CASM up 4.0%, and CASM-ex2 down 0.1%, compared to first-quarter 2022.
Diluted loss per share of $0.59, adjusted diluted loss per share1 of $0.63.
Average fuel price per gallon of $3.33.
Reduced adjusted total debt3 by $4.6 billion in the last 12 months.
Key Highlights
United reached a tentative agreement with the International Association of Machinists & Aerospace Workers (IAM) for a new, industry-leading contract for our nearly 30,000 IAM-represented employees. Voting is expected to complete in early May.
Today announced the largest South Pacific network expansion ever to and from the continental U.S., including the first non-stop flight between San Francisco and Christchurch (subject to government approval). With 66 flights between the United States and Australia/New Zealand every week, United will operate nearly 40% more flights from the United States to Australia and New Zealand next northern winter versus last year.
Launched the United Airlines Ventures Sustainable Flight FundSM, a first-of-its-kind investment vehicle designed to support start-ups focused on decarbonizing air travel by accelerating the research, production and technologies associated with sustainable aviation fuel.
Opened expanded and newly renovated global Inflight Training Center in Houston, Texas – the $32 million expansion project more than doubles the available training space and supports the airline’s plan to hire and train a total of 15,000 people in 2023, including 4,000 flight attendants.
United announced a new industry-leading family seating policy enabled by dynamic seat map technology that makes it easier for children under 12 to sit next to an adult – since launch United enabled almost 50,000 more families to sit with their children.
United collaborated with Sesame Workshop to announce Oscar the Grouch as its first Chief Trash Officer as he and the airline celebrate his love of rubbish. United’s campaign is designed to promote the expected benefit of using sustainable aviation fuel more broadly.
Operational Performance
Achieved the lowest first quarter seat cancel rate (1.09%) since the first quarter of 2012, leading the U.S. industry despite the greater impact of weather on United than any other airline.
United flew the most mainline seats 413,000 in company history and most mainline flights 2,300 daily for the quarter.
United finished first in on-time departures at O’Hare International Airport, Denver International Airport, Los Angeles International Airport, and George Bush Intercontinental Airport and second in on-time departures out of San Francisco International Airport and Dulles International Airport as well as at our international stations.
Net Promoter Score (NPS) performance for clubs and inflight service satisfaction was at an all-time high for the quarter since the launch of the NPS survey in 2020.
Network
Through an enhanced cross-border joint business agreement with Air Canada announced industry-leading capacity and new routes between Canada and the U.S. for summer 2023.
Launched four new international routes between Dubai, United Arab Emirates, and Newark/New York and between Tokyo-Haneda, Japan, and Newark/New York, Los Angeles, and Washington D.C. Reintroduced four international routes not flown since the beginning of the pandemic – service between Tokyo-Narita, Japan and Denver, Osaka, Japan and San Francisco, Hong Kong, and San Francisco, and Managua, Nicaragua, and Houston.
Resumed non-stop service between Shanghai and San Francisco, becoming the first U.S. airline to not require a technical stop between the U.S. and Shanghai since November 2020.
Increased domestic premium seat capacity 25% versus first quarter 2019.
Customer Enhancements
The new United ClubSM at O’Hare International Airport had a strong debut in January 2023 with stellar customer satisfaction scores.
During the first quarter, over 1 million customers used United’s “bag drop shortcut” which streamlines the bag-check process and is active at 38 airports.
With the opening of the new Terminal A at Newark Liberty International Airport, added 12 gates for its operations and expects to have 17 total gates by the end of 2023.
Communities
President Joe Biden announced his intent to appoint United President Brett Hart to the President’s Export Council – the principal national advisory committee on international trade.
Celebrated the graduation of United Aviate Academy’s inaugural class of pilots, an important step towards training the next generation of talented, qualified, and motivated aviators.
Announced a $5 million investment in algae-based fuel producer Viridos to turn microalgae into sustainable aviation fuel through the first new investment of its recently announced United Airlines Ventures Sustainable Flight Fund since its launch.
Announced a $15 million investment by United Airlines Ventures Sustainable Flight Fund (UAV) in carbon capture technology company Svante, that provides materials and technology as part of the value chain that has the potential to convert CO2 removed from the atmosphere and from industrial emission sources into sustainable aviation fuel.
United Airlines, Tallgrass, and Green Plains Inc. announced a new joint venture – Blue Blade Energy – to develop and then commercialize a novel sustainable aviation fuel technology that uses ethanol as its feedstock.
Nearly 4,000 hours were volunteered by more than 470 employees. More than 8.4 million miles donated by MileagePlus® members to more than 60 non-profit organizations.
Launched our Miles on a MissionSM campaign to support Turkey and Syria earthquake relief, raising nearly 400,000 miles and $25,000 for Airlink, American Red Cross, and World Central Kitchen.
Nearly 300 employees participated in Martin Luther King Jr. Day parades and volunteer activities across the company’s network.
Supported Sesame Workshop’s Welcome Sesame initiative, delivering critically needed early childhood development opportunities to families affected by conflict and crisis.
Led a Black History Month fundraising campaign – alongside Chase and Visa – for our cardmembers, supporting The Thurgood Marshall College Fund, The Leadership Conference Education Fund, The Legal Defense Fund, and The United Negro College Fund.
Earnings Call
UAL will hold a conference call to discuss first quarter 2023 financial results, as well as its financial and operational outlook for second quarter 2023 and beyond, on Wednesday, April 19, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
Outlook
This press release should be read in conjunction with the company’s Investor Update issued in connection with this quarterly earnings announcement, which provides additional information on the company’s business outlook (including certain financial and operational guidance) and is furnished with this press release with the U.S. Securities and Exchange Commission on a Current Report on Form 8-K. The Investor Update is also available at ir.united.com. Management will also discuss certain business outlook items during the quarterly earnings conference call.
The company’s business outlook is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release. Please see the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
About United
United’s shared purpose is “Connecting People. Uniting the World.” From our U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C., United operates the most comprehensive global route network among North American carriers. United is bringing back our customers’ favorite destinations and adding new ones on its way to becoming the world’s best airline. For more about how to join the United team, please visit www.united.com/careers and more information about the company is at www.united.com. United Airlines Holdings, Inc., the parent company of United Airlines, Inc., is traded on the Nasdaq under the symbol “UAL”.
Website Information
We routinely post important news and information regarding United on our corporate website, www.united.com, and our investor relations website, ir.united.com. We use our investor relations website as a primary channel for disclosing key information to our investors, including the timing of future investor conferences and earnings calls, press releases and other information about financial performance, reports filed or furnished with the U.S. Securities and Exchange Commission, information on corporate governance and details related to our annual meeting of shareholders. We may use our investor relations website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We may also use social media channels to communicate with our investors and the public about our company and other matters, and those communications could be deemed to be material information. The information contained on, or that may be accessed through, our website or social media channels are not incorporated by reference into, and are not a part of, this document.
Cautionary Statement Regarding Forward-Looking Statements:
This press release and the related attachments and Investor Update (as well as the oral statements made with respect to information contained in this release and the attachments) contain certain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, relating to, among other things, goals, plans and projections regarding the company’s financial position, results of operations, market position, capacity, fleet, product development, ESG targets and business strategy. Such forward-looking statements are based on historical performance and current expectations, estimates, forecasts and projections about the company’s future financial results, goals, plans, commitments, strategies and objectives and involve inherent risks, assumptions and uncertainties, known or unknown, including internal or external factors that could delay, divert or change any of them, that are difficult to predict, may be beyond the company’s control and could cause the company’s future financial results, goals, plans, commitments, strategies and objectives to differ materially from those expressed in, or implied by, the statements. Words such as “should,” “could,” “would,” “will,” “may,” “expects,” “plans,” “intends,” “anticipates,” “indicates,” “remains,” “believes,” “estimates,” “projects,” “forecast,” “guidance,” “outlook,” “goals,” “targets,” “pledge,” “confident,” “optimistic,” “dedicated,” “positioned” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. All statements, other than those that relate solely to historical facts, are forward-looking statements.
Additionally, forward-looking statements include conditional statements and statements that identify uncertainties or trends, discuss the possible future effects of known trends or uncertainties, or that indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law or regulation.
Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: execution risks associated with our strategic operating plan; changes in our network strategy or other factors outside our control resulting in less economic aircraft orders, costs related to modification or termination of aircraft orders or entry into less favorable aircraft orders, as well as any inability to accept or integrate new aircraft into our fleet as planned; any failure to effectively manage, and receive anticipated benefits and returns from, acquisitions, divestitures, investments, joint ventures and other portfolio actions, or related exposures to unknown liabilities or other issues or underperformance as compared to our expectations; the adverse impacts of the ongoing COVID-19 pandemic on our business, operating results, financial condition and liquidity; adverse publicity, harm to our brand, reduced travel demand, potential tort liability and voluntary or mandatory operational restrictions as a result of an accident, catastrophe or incident involving us, our regional carriers, our codeshare partners or another airline; the highly competitive nature of the global airline industry and susceptibility of the industry to price discounting and changes in capacity, including as a result of alliances, joint business arrangements or other consolidations; our reliance on a limited number of suppliers to source a majority of our aircraft and certain parts, and the impact of any failure to obtain timely deliveries, additional equipment or support from any of these suppliers; disruptions to our regional network and United Express flights provided by third-party regional carriers; unfavorable economic and political conditions in the United States and globally (including inflationary pressures); reliance on third-party service providers and the impact of any significant failure of these parties to perform as expected, or interruptions in our relationships with these providers or their provision of services; extended interruptions or disruptions in service at major airports where we operate and space, facility and infrastructure constrains at our hubs or other airports; geopolitical conflict, terrorist attacks or security events; any damage to our reputation or brand image; our reliance on technology and automated systems to operate our business and the impact of any significant failure or disruption of, or failure to effectively integrate and implement, the technology or systems; increasing privacy and data security obligations or a significant data breach; increased use of social media platforms by us, our employees and others; the impacts of union disputes, employee strikes or slowdowns, and other labor-related disruptions or regulatory compliance costs on our operations; any failure to attract, train or retain skilled personnel, including our senior management team or other key employees; the monetary and operational costs of compliance with extensive government regulation of the airline industry; current or future litigation and regulatory actions, or failure to comply with the terms of any settlement, order or arrangement relating to these actions; costs, liabilities and risks associated with environmental regulation and climate change, including our climate goals; high and/or volatile fuel prices or significant disruptions in the supply of aircraft fuel (including as a result of the Russia-Ukraine military conflict); the impacts of our significant amount of financial leverage from fixed obligations and the impacts of insufficient liquidity on our financial condition and business; failure to comply with financial and other covenants governing our debt, including our MileagePlus® financing agreements; the impacts of the proposed phaseout of the London interbank offer rate; limitations on our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income for U.S. federal income tax purposes; our failure to realize the full value of our intangible assets or our long-lived assets, causing us to record impairments; fluctuations in the price of our common stock; the impacts of seasonality, weather events, infrastructure and other factors associated with the airline industry; increases in insurance costs or inadequate insurance coverage and other risks and uncertainties set forth in Part I, Item 1A. Risk Factors, and under “Economic and Market Factors” in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.
Non-GAAP Financial Information:
In discussing financial results and guidance, the company refers to financial measures that are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The non-GAAP financial measures are provided as supplemental information to the financial measures presented in this press release that are calculated and presented in accordance with GAAP and are presented because management believes that they supplement or enhance management’s, analysts’ and investors’ overall understanding of the company’s underlying financial performance and trends and facilitate comparisons among current, past and future periods. Non-GAAP financial measures such as adjusted operating margin (which excludes special charges (credits)), CASM-ex (which excludes the impact of fuel expense, profit sharing, special charges and third-party expenses), adjusted pre-tax margin (which is calculated as pre-tax margin excluding operating and nonoperating special charges (credits) and unrealized (gains) losses on investments, net) and adjusted net income typically have exclusions or adjustments that include one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded because the company believes they neither relate to the ordinary course of the company’s business nor reflect the company’s underlying business performance.
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in the press release and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
.jpg){kind=tracking}
