UAL Q2 2021 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q2 2021 Earnings Call
• Date: July 21, 2021 at 2:30 PM UTC
• Management Team:
  • Kristina Munoz (Director of Investor Relations)
  • Scott Kirby (Chief Executive Officer)
  • Brett Hart (President)
  • Andrew Nocella (Executive Vice President and Chief Commercial Officer)
  • Jerry Laderman (Executive Vice President and Chief Financial Officer)

Call Summary

Financial Performance

• For the second quarter of 2021, United reported a GAAP pre-tax loss of $600 million and an adjusted pre-tax loss of $1.6 billion.
• Adjusted EBITDA margin for the second quarter ended down 10.7% versus the prior comparable metric and the adjusted EBITDA margin for the month of June was a positive 9%.
• Adjusted operating expenses for the second quarter were down 32% versus the second quarter of 2019, with the variance versus guidance attributable to greater fuel consumption and higher fuel prices.
• TRASM for the second quarter was down 11% versus 2019, and management stated that Q3 TRASM is expected to be positive.
• Cargo revenues were $606 million in the quarter, which was the highest cargo revenue quarter ever and up 105% from 2Q 2019.
• Domestic yields were described as running ahead of 2019 in July for the months observed, while overall domestic yields for the quarter were still likely to be slightly negative due to slower business recovery.

Guidance

• United expects to generate positive adjusted pre-tax income in the month of July and to generate positive adjusted pre-tax income for both the third and fourth quarters of 2021.
• Third quarter CASMX is expected to be up approximately 17% versus the same period in 2019, with system capacity down 26% versus 2019 in the quarter.
• Q3 system capacity is expected around 26% versus Q3 of 2019 and about 39% higher than capacity flown in Q2 2021.
• Q3 domestic capacity is expected to be down about 20% versus Q3 2019 and up about 43% versus Q2 2021.
• Q3 international capacity is expected to be down about 36% versus 2019, versus down 53% in Q2 2021.
• Management reiterated confidence that 2022 CASMX will be lower than 2019 and reiterated long-term targets of CASMX down 4% in 2023 and down 8% in 2026 versus 2019.