FLYING Magazine

While United Airlines (NASDAQ: UAL) reported a $1.4 billion loss in the first quarter on revenue of $7.6 billion, the company said it expects to be profitable from the second quarter onward because of surging air travel demand. 

Furthermore, it projects its second-quarter revenue to be the strongest quarterly revenue in company history, with revenue per passenger mile up 17 percent over 2019. This is partly the result of higher fares that customers have faced because of inflation and surging fuel prices. The company paid $2.88 a gallon for fuel in the first quarter compared to $1.74 last year—wherein travelers made up the deficit. 

“The demand environment is the strongest it’s been in my 30 years in the industry—and United and its customers will benefit more than any other airline,” United Airlines CEO Scott Kirby said in a news release. 

777’s Return Will Help

Capacity for the quarter was still down 19 percent compared to the first quarter, which the company attributed to the Omicron variant, which forced the airline to scale down some of its operations. What will likely help is the re-addition of 52 grounded Pratt & Whitney-powered Boeing 777 aircraft back to the fleet by summer, adding much-needed capacity as international travel restrictions continue to ease. 

The airline said there were indications that business travel, one of the most profitable segments, was rapidly returning, including trips to Asia. 

With that in mind, Kirby reinforced that the airline expected to report a full-year profit in 2022, which would be the first since the beginning of the pandemic. 

Ongoing Need for Pilots

A worsening pilot shortage felt through its regional partners could temper growth. The airline has had to cut routes to some cities as its partners have been unable to find flight crews to complete the trips, the airline said. 

To offset that in the long run, earlier this year, the company positioned itself as the only major U.S. airline to own a flight training school when it opened its United Aviate Academy in Goodyear, Arizona. With the academy, the airline hopes to train 5,000 new pilots by 2030, with a commitment that half of them will be women and people of color. So far, 80 percent of the students enrolled fit at least one of those criteria. 

The airline announced plans to potentially quadruple the fleet size at the United Aviate Academy to support its mission, adding 25 new, state-of-the-art Cirrus TRAC SR20 aircraft to its current fleet. Kirby has said the airline plans to hire as many as 10,000 pilots through 2030. The airline hopes its academy will play an important role in shortening the timeline for pilots to get to its mainline.

Throughout the quarter, the airline added strategic partners such as Purdue University and JSX to its Aviate partner program to give its candidates initial flying experiences as flight instructors and crew members. 

Kirby said the second quarter could be the “historic inflection point for our business,” as the airline plans to fly up to 87 percent of the flying schedule it did during the same time in 2019 without sacrificing reliability for short-term profits.

Following the call, United’s share price was trading at $51.65, up nearly 11 percent for the day, but still below its 52-week high of $60.58. 

The post Despite Losses, United Airlines Says Its Benefiting From Surging Demand appeared first on FLYING Magazine.

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