United Airlines Fourth-Quarter and Full-Year Financial Results

posted on 18th January 2023 by Eddie Saunders
United Airlines Fourth-Quarter and Full-Year Financial Results

United Airlines (UAL) today reported fourth-quarter and full-year 2022 financial results.

The company exceeded adjusted operating margin1 guidance in the fourth quarter reporting a 11.1% operating margin; 11.2% operating margin on an adjusted basis1.

Additionally the company reported a 9.1% pre-tax margin on a GAAP basis and 9.0% on an adjusted basis1, achieving its 2023 target ahead of schedule.

The company grew operating revenue by 14% and TRASM (total revenue per available seat mile) by 26%, both versus fourth quarter 2019.

The company remains confident in the 2023 United Next adjusted pre-tax margin1 target of about 9%.

United was able to recover quickly from significant irregular operations in December as a result of winter storm Elliott.

During the key holiday travel days between December 21 and 26, nearly 36% of all United flights were exposed to severe weather.

Despite that impact, 90% of United customers made it to their destination within 4 hours of their scheduled arrival time.

The company credits significant investment in its people, resources, technology and infrastructure over the past few years with its ability to recover from significant weather events.

“Thank you to the United team that, last month, managed through one of the worst weather events in my career to deliver for so many of our customers and get them home for the holidays,” said United Airlines CEO Scott Kirby.

“Our dedicated team used our state-of-the-art tools to prepare for the bad weather, take care of our customers and quickly recover once the worst of the weather had passed.

“Over the last three years, United has made critical investments in tools, infrastructure and our people – all of which are essential investments in our future.

“That’s why we’ve got a big head start, and we’re now poised to accelerate in 2023 as our United Next strategy becomes a reality.”

Fourth-Quarter Financial Results

  • Net income of $843 million, adjusted net income1 of $811 million.
  • Capacity down 9% compared to fourth-quarter 2019.
  • Total operating revenue of $12.4 billion, up 14% compared to fourth-quarter 2019.
  • TRASM of up 26% compared to fourth-quarter 2019.
  • CASM of up 21%, and CASM-ex1 of up 11%, compared to fourth-quarter 2019.
  • Operating margin of 11.1%, adjusted operating margin1 of 11.2%, both up over 2 pts. compared to fourth-quarter 2019.
  • Pre-tax margin of 9.1%, adjusted pre-tax margin1 of 9.0%, both up and around 1 pt. compared to fourth-quarter 2019.
  • Average fuel price per gallon of $3.54.

Full-Year Financial Results

  • Net income of $737 million, adjusted net income1 of $831 million.
  • Operating margin of 5.2%, adjusted operating margin1 of 5.5%.
  • Pre-tax margin of 2.2%, adjusted pre-tax margin1 of 2.5%.
  • Ending available liquidity2 of $18.2 billion.

Key Highlights

  • Announced the largest widebody order by a U.S. carrier in commercial aviation history: 100 Boeing 787 Dreamliners with options to purchase 100 more. Also added 100 additional Boeing 737 MAX aircraft by exercising 44 options and adding 56 new firm orders. This historic purchase is the next chapter in the ambitious United Next plan and will bolster the airline’s leadership role in global travel for years to come.
  • Officially opened the United Aviate Academy, the only major U.S. airline to own a flight training school, with a historic inaugural pilot class of 80% women or people of color.
  • Launched Calibrate, an in-house apprenticeship program that will help grow and diversify its pipeline of Aircraft Maintenance Technicians.
  • Launched a new, national advertising campaign – “Good Leads The Way” – that tells the story of United’s leadership in areas like customer service, diversity and sustainability, and captures the optimism fueling the airline’s large ambitions at a time of unprecedented demand in air travel.
  • Announced and began the expansion of its Flight Training Center in Denver, already the largest facility of its kind in the world.
  • Announced a historic commercial agreement with Emirates that will enhance each airline’s network and give customers easier access to hundreds of destinations around the world. Also announced a new direct flight between Newark/New York and Dubai beginning in March 2023, subject to government approval.
  • Appointed by Department of Homeland Security Secretary Alejandro Mayorkas, United Chief Executive Officer Scott Kirby served as the Co-Chair of the Homeland Security Advisory Council and also served on the Board of Directors of the Business Roundtable as the Chairman of the Education and Workforce Committee.
  • Hosted the first Eco-Skies Alliance Summit, bringing together leaders, corporate customers, and senior U.S. government officials for important discussions on sustainable aviation fuel, best practices of how to reduce carbon emissions from flying and how to collaborate on future sustainability solutions.

Operational Performance

  • In the fourth quarter, on-time arrival performance (arrival within 14 minutes of schedule) was at 80%, the best quarterly performance of 2022.
  • United finished first among network carriers for on-time departures and completion at its three largest hubs – Denver, O’Hare and Houston – for the fourth-quarter and full-year 2022.
  • In 2022, over 650,000 passenger connections were saved with ConnectionSaver, resulting in United achieving the lowest misconnect rate ever for the fourth quarter and full year (excluding 2020/2021).
  • In the fourth quarter, Inflight Service, Check-In and Club Satisfaction beat their record from last quarter and ended with their highest quarterly performance since the launch of the NPS (Net Promoter Score) survey in 2020.