United Airlines (UAL) 2T 21 cuts losses

United Airlines on Tuesday announced an increase in second-quarter revenue and cut losses thanks to a resurgence in air travel, the latest carrier to publish an improvement outlook for one of the sectors most affected by the pandemic.

The Chicago-based airline said it expects to generate positive adjusted pre-tax profit for the third and fourth quarters and that it plans to increase its flights in response to higher travel demand. Delta Air Lines and American Airlines also said last week they saw improved bookings and bottom lines.

United’s revenue of $ 5.47 billion for the three months ended June 30, is down more than 50% from the same quarter of 2019, but is up nearly 70% from the first quarter of the year as U.S. officials widely rolled out Covid vaccines this spring, attractions reopened and more customers returned to air travel.

However, United still recorded a net loss of $ 434 million, their sixth consecutive quarterly loss, in the quarter ended June 30. In the first three months of 2021, United lost almost $ 1.4 billion. The airline said it recorded $ 1.1 billion in revenue from a federal wage subsidy, part of the $ 54 billion congressional set aside for U.S. airlines since March 2020.

Here is United’s second quarter performance against Wall Street expectations, based on average estimates compiled by Refinitiv:

• Adjusted results per share: a loss of $ 3.91, in line with expectations.

• Total revenue: $ 5.47 billion versus $ 5.37 billion in expected revenue.

United shares fell more than 1% in after-hours trading.

The airline said it ended the second quarter with around $ 23 billion in cash on hand.

After adjusting for one-off items, United recorded a loss per share of $ 3.91, according to analysts’ estimates.

United said its capacity for the current quarter would be down 26% from 2019 levels. In the second quarter, it flew 46% less than in 2019. It said its cost per seat mile , excluding fuel and other special charges, is likely to increase by 17% from the third quarter of 2019, in part due to shorter-than-usual flights. and using smaller planes.

Fuel costs have also climbed. United said they paid an average of $ 1.97 a gallon for jet fuel in the second quarter, up nearly 67% from a year ago.

Airlines have reported an increase in bookings since this spring as vaccines have been widely released, Covid cases have plummeted and authorities have dropped restrictions in the pandemic era.

United executives are expected to discuss the results and provide a more in-depth outlook on a call Wednesday at 10:30 a.m.ET.

Analysts are expected to ask airline management about trends in international and business travel bookings, two pillars of United’s business before the pandemic. The fast-spreading delta variant has raised concerns about the renewal of travel limits.

On Monday, the State Department and the Centers for Disease Control and Prevention advised against travel to the UK due to the increase in the number of cases.

But United and other airlines are optimistic that demand will recover. United last month announced plans to buy 270 Boeing and Airbus narrow-body planes, its largest ever aircraft order, to replace older planes and expand the carrier over the next several years.