United Airlines shares fell 1.1 % in premarket trading on Thursday after the airline was forced to declare that traffic levels will not recover to pre-pandemic levels this year.
The airline had previously predicted that capacity will increase by 5% in 2022 compared to pre-pandemic levels. The grim advice comes as Omicron-variant Covid-19 causes travel to be delayed in a variety of ways. Due to illness-related absenteeism and international travel bans imposed hurriedly by a number of nations to stem the spread of disease, the firm has had to cancel flights this year.
United expects its costs to be 14 % to 15 % higher in the current quarter than in the same period last year, owing to employee shortages and other supply chain issues. With oil prices back at their highest in seven years, the cost of aviation fuel is also becoming a problem. United's total operating revenue increased 140 % year over year to $8.2 billion in the December quarter, although it was still just three-quarters of the same time in 2019. The carrier posted a loss of $1.6 per share on an adjusted basis for the three months ended in December, its eighth consecutive quarter of losses. It was, however, narrower than projected and a significant improvement above $7 a year ago.
In a statement, United Chief Executive Officer Scott Kirby said, "While Omicron is affecting near-term demand, we remain confident about the spring and thrilled about the summer and beyond."
United announced that its Boeing 777-200 planes with Pratt & Whitney engines will resume service in the current quarter. Last year, one of its 52 wide-body jets was forced to make an emergency stop in Denver after an engine failure on one of its trips to Honolulu.