United Airlines’ (UAL) fourth-quarter profit and outlook for early 2023 topped Wall Street estimates thanks to strong travel demand and high fares. United reported an $843 million profit for the last three months of 2022, a 31% increase compared with three years earlier, on revenue of $12.4 billion. That revenue was almost 14% higher than in the same period in 2019, before the pandemic, despite flying 9% less, helping it post a profit despite a 21% increase in unit costs from three years earlier.
United shares were down more than 2% on Wednesday morning. United expects to expand flying 20% in the first quarter from a year ago, it said in a filing. It forecast capacity growth in the high teens for the full year over 2022. United also said in an investor presentation that staffing issues, plane shortages and outdated tech would restrict industry capacity this year.
Why it matters
Consumers’ appetite for air travel and willingness to pay higher fares has helped airlines return to profitability despite higher costs for fuel, labor and other expenses tied to ramping their networks back up. Meanwhile, aircraft delivery delays and training backlogs have constrained airlines’ growth, keeping fares high. United and others are hoping to boost pilot and crew counts into the next fiscal year. The company on Tuesday noted the debut of its Calibrate apprenticeship program.