United Airlines said it is delaying planned capacity increases until later this year, blaming the omicron variant of covid for weaker demand in the current quarter.
The Chicago, Ill.-based airline reported a net loss of $646 million, or $1.99 a share in the fourth quarter vs. a loss of $1.9 billion, or $6.39 a share, a year ago. Sales rose to $8.2 billion from $3.4 billion last year.
The numbers beat expectations of analysts surveyed by FactSet, who predicted a loss of $2.09 per share.
"While Omicron is impacting near term demand, we remain optimistic about the spring and excited about the summer and beyond," said United Airlines CEO Scott Kirby in a statement. "We look forward to beginning to return the Pratt & Whitney 777s to service this quarter and getting the full airline back to normal utilization — as we ramp up along with demand this year."
United grounded 52 of its 777 wide body aircraft equipped with engines made by Pratt & Whitney last February, after an engine failure forced one of its flights to make an emergency landing in Denver.
In December, the FAA called for improved inspections of engine fan blades, additional inspections of other components and strengthening of engine cowlings.
Travel Took A Serious Hit
Even with a narrower-than-expected quarterly loss, United Airlines (UAL) is struggling to get numbers back to where they were pre-pandemic. The $8.2 billion revenue figure is down approximately 25% from the same quarter in 2019, before the pandemic.
While vaccination rates have helped prevent the kinds of widespread lockdowns seen in the early days of the pandemic, record-high omicron cases still leave many afraid to travel.
The airline still expects strong demand for flights during the spring and summer months. Plans to secure new planes and otherwise expand services are still in place, the company said, but may take longer to implement amid lingering uncertainty around COVID-19.
What Does This Mean For Stock?
Shares of United fell by about 2% in after-hours trading on Wednesday. The airline said that it will continue to work towards bringing back business post-pandemic but, like most airlines, struggles to the majors disruption caused by a prolonged health crisis.
