UAL Q2 2022 Earnings

Call Details

• Call Title: United Airlines Holdings, Inc. Q2 2022 Earnings Call
• Date: July 21, 2022 at 2:30 PM UTC
• Management Team:
  • Scott Kirby (Chief Executive Officer)
  • Brett Hart (President)
  • Toby Enqvist (Executive Vice President and Chief Operating Officer)
  • Andrew Nocella (Executive Vice President and Chief Commercial Officer)
  • Jerry Laderman (Executive Vice President and Chief Financial Officer)
  • Kristina Munoz (Director of Investor Relations)

Call Summary

Financial Performance

• United reported Q2 2022 pre-tax income of $459 million and adjusted pre-tax income of $611 million.
• United's adjusted operating margin for Q2 2022 was just over 8%.
• Second quarter CASM-X ended up 17% versus Q2 2019 on a comparable basis.
• TRASM finished 24% higher in the quarter while capacity was down 15% versus Q2 2019.
• June top-line revenues were $4.6 billion, which the company said was 12% above its previous best month on 14% less capacity.
• Passenger yields were up 20% versus the comparable pre-COVID baseline referenced on the call.
• Cargo yields remained 107% above 2019 levels and total cargo revenue was up 95% versus 2019.
• MileagePlus revenues were up 23% versus Q2 2019 and ancillary revenue per passenger was up almost 30% versus 2019.

Guidance

• The company expects Q3 TRASM to improve 24% to 26% versus Q3 2019.
• United expects Q3 CASM-X to be up approximately 16% to 17% versus Q3 2019 on capacity down roughly 11% versus Q3 2019.
• United expects Q3 adjusted operating margin of 10% assuming a fuel price per gallon of $3.81.
• Fourth quarter capacity is expected to remain below original targets at approximately down 10% to 11% versus 2019, and the company expects Q4 CASM-X up about 14%.
• Full-year 2023 capacity is now expected to be up about 8% versus 2019, down materially from the prior United Next plan of ~20% growth.
• Jerry stated that using a $3.40 per gallon forward curve, unit revenue could decline by up to eight points from current levels and the company would still achieve the 9% United Next adjusted pre-tax margin target.
• The company attributed the Q2 margin shortfall versus May guidance largely to approximately $150 million of incremental fuel expense versus its May forecast.