United Airlines’ financial performance has resulted in a year-end profit for 2022 in the results released on 17 January 2023. Many airlines have been having difficulties due to the pandemic and the staff shortages in the aftermath leading to mass delays and cancellations. United Airlines’ profit for the fourth quarter ending 31st December was 843 million US dollars. This is less than the profit for the previous quarter, which was 942 million US dollars. Nevertheless, United Airlines’ financial performance still continues in the black.
United Airline’s Financial Performance
So what is the story for the Year as a whole? United Airlines’ financial performance at the Year End resulted in an overall net income of 737 million US dollars. The fact that this is less than the fourth quarterly profits is possibly reflective of the problems the industry as a whole went through during the pandemic and the subsequent issues afterwards. As we know, in particular, the independence day weekend in the US and Canada was heavily affected by delays and cancellations, affecting many North American airlines.
The profit made by United Airlines was more than that made at the year-end in 2021 when there was a net loss of 1.964 billion US dollars. Clearly, recovering from such a colossal loss will take time; therefore, this probably can somewhat explain why United Airlines’ financial performance is not that high this year.
It appears that United Airlines has had to pay high interest on loans totalling 1.778 billion US dollars, more than the 1.657 billion dollars paid in the previous year. It may well be that the loan repayments have increased as borrowing took place to rebuild after pandemic restrictions were lifted. As we know, getting planes back into action and recruiting more staff would have cost more.
United Airlines Revenue
In terms of revenue, however, United Airlines’ financial performance resulted in operating revenue (money received from services provided) of 44.955 billion US dollars. This was more than the revenue gained in pre-pandemic 2019, where the airline made 43.259 billion US dollars at the year-end. As one can see, United Airlines is receiving more money from its customers. This shows that the profit made by United Airlines could potentially be more; however, United Airlines is clearly having issues with controlling costs. It may be that events such as the war in Ukraine are also hampering costs, including the cost of fuel, as it is also affecting other airlines.
The company’s response to United Airlines’ financial release was that it was encouraged by the increase in operating revenue. The dip in profits in the fourth quarter was largely attributed to storm Elliot which caused disruption to travel during a busy time of the year in December between the 21st and the 26th. However, the company commented that they were able to recover quickly from the disruption and that 90% of customers were taken to their destination within 4 hours of their scheduled arrival time.
As one can see, airlines, in general, have had a lot of obstacles to growth due to the pandemic, the war in Ukraine, and in the case of United Airlines’ issues during storm Elliot in the US during the busy Christmas time. However, United Airlines’ financial performance still resulted in a profit for the year, which is good news for the airline. We have to wait to see however how the situation progresses.
What do you think about the financial situation of United Airlines? Do you think it compares well to other North American airlines? Let us know in the comments!
