United Airlines reported a $646 million loss during its fourth quarter last year, citing the recent spike in COVID-19 cases as the main reason. The airline said it expects to incur further losses in the coming quarters as cases continue to rise.
The airline said bookings remained lower than expected in recent weeks owing to the surge in infections. The company added that it expects further delays in its recovery because of the prolonged pandemic.
The Chicago-based company said it expects its first-quarter earnings to be 20% to 25% less than its earnings over the same period in 2019. It added that it expects costs, other than fuel, to increase by about 15% on a per-seat basis and its capacity to be down by 16% during the coming quarter.
United has cut its expectation for growth in 2022, stating it would fly fewer flights this year than it did three years ago. The company said it has also abandoned its ambition to boost capacity by 5% from pre-pandemic levels.
The company said the spread of the Omicron variant is affecting short-term bookings, but travel in the spring and summer is expected to improve. Long-term financial projections for 2023 and 2026 are on track.
The airline's loss for its fourth quarter is an improvement when compared to the $1.9 billion it lost during the same quarter in 2020. However, it is disastrous when compared to the $641 million in profit it reported for its fourth quarter the year prior, before the pandemic. In its earnings report, the company said it incurred an adjusted loss of about $1.60 per share, excluding special items. The figure is slightly better than the $2.09 per share loss expected by analysts.
United reported revenue of $8.19 billion for the period, 25% lower than its revenue over the same period in 2019. The figure was better than the $7.96 billion revenue forecasted by analysts.
For the entire year last year, United reported a loss of $1.96 billion. The loss already takes into account the $4 billion it received from the federal pandemic relief program to help cover its labor costs.
In the earnings release, United Airlines CEO Scott Kirby said that he is confident the company will be able to overcome the challenges presented by the pandemic. He added that he is grateful to all employees and customers who have stuck with the company as it fights through the "unprecedented obstacles."
The airline ended the year with 11,800 fewer employees when compared to before the pandemic. The company's share price dropped by more than 2% in after-hours trading following the release of its earnings report.
