United Airlines’ profit dented by delta variant
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United Airlines Holdings Inc. said the spread of the more contagious variant of Covid-19 slowed flying during the third quarter but hasn’t derailed its recovery.
United on Tuesday reported a third-quarter profit of $473 million, including the final $1.1 billion in government grants the airline received to pay workers during the quarter. Excluding the government aid, United reported a loss of $329 million, compared with a profit of over $1 billion in the third quarter of 2019.
UNITED AIRLINES FLYING 3,500 US FLIGHTS IN DECEMBER; MOST SINCE COVID-19 PANDEMIC BEGAN
Airline losses have slowed as travel has resumed in recent months. Last year, United reported adjusted losses of close to $2.4 billion during the third quarter.
Clorox Total 360 System is a portable machine that can disinfect surfaces. (United Airlines)
The spread of the highly transmissible Delta variant was a setback for airlines at the end of the summer. Leisure travel had roared back, but people canceled trips or put off booking new ones as the new variant spread. Businesses delayed bringing workers back to offices, pushing back a rebound in corporate travel that airlines had hoped to see this fall.
United said that the Delta variant delayed travel recovery but that the company remains on track to meet its 2022 financial targets. The airline’s total quarterly revenue of $7.8 billion was down 32% from the 2019 third quarter but outpaced what analysts had anticipated.
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SAN FRANCISCO, CALIFORNIA - JULY 08: A United Airlines passenger pushes a luggage cart past closed check-in kiosks at San Francisco International Airport on July 08, 2020 in San Francisco, California. As the coronavirus COVID-19 pandemic continues, U
"The headwinds we’ve faced are turning to tailwinds," United Chief Executive Officer Scott Kirby said in a statement, citing the planned reopening of travel from Europe and elsewhere to the U.S. next month and resuming business travel.
United said it plans to increase its international flying capacity by 10% in 2022 while keeping domestic capacity flat. The airline said last week that it would add a number of new trans-Atlantic routes next year.
Airline executives have said travel demand has stabilized after wobbling late in the summer, and carriers have said they expect a strong holiday travel season. The Biden administration said last week that it would lift travel restrictions that have barred international travelers from Europe from coming to the U.S. starting on Nov. 8. The announcement spurred a flurry of web searches for travel to the U.S. over the weekend, according to travel company Kayak.
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Last week, United rival Delta Air Lines Inc. reported a $194 million profit for its most recent quarter, excluding the impact of government assistance. But the carriers said rising fuel costs would likely dent its earnings in the final quarter of the year. American Airlines Group Inc. and Southwest Airlines Co. are set to report third-quarter results later this week.
United had previously said it expected to earn pre-tax profits in the second half of the year on an adjusted basis, but in September the company lowered its outlook, citing slowing demand due to the Delta variant. The airline’s adjusted loss of $1.02 a share in the third quarter was lower than the $1.67 a share loss analysts had anticipated.