The owner of this site is not an investment advisor, financial planner, nor legal or tax professional and articles here are of an opinion and general nature and should not be relied upon for individual circumstances.Īdvertiser Disclosure: Some links to credit cards and other products on this website will earn an affiliate commission. This site is for entertainment purposes only. Kirby got too bullish, started believing his own b.s., dismissed the number crunchers who probably warned him in private this would happen and now he is going to have to eat humble pie. However this year their TATL schedule was more robust than it was in Q1 of 2019. Usually United would pull back on some TATL flights, some would get reduced to weekly and others would be suspended from January through the first week or so of March. It has been a non revs dream, even employees who just stated are getting Polaris on international flights during Q1 2023. Traditionally Q1 is when there is the least amount of traffic especially TATL traffic, in Q1 of this year United is operating their most robust TATL schedule that we’ve ever seen. I think the real reason United expects a loss in Q1 has more to do with their international network than any thing else. Why are they factoring in a pilot contract into Q1 results when they don’t have a deal with their pilots yet? Fuel prices being up is an excuse, fuel prices have been up for more than a year. I’ll have more thoughts on the pilots contract angle next. While Kirby has emphasized that the full year still looks great, higher fuel prices, weak business demand, and a looming new contract with pilots are to blame. United Airlines has updated its guidance and now expects to report a quarterly loss. Business travel remains weak and was seasonally-adjusted winter travel was lower than excepted.United is factoring in pilot contracts into the earnings forecast.However, we do know a few things, as revealed in the 8-K: I do feel confident about 2Q and beyond.Īgain, Kirby feels confident about next quarter and the full year, but does not get into the weeds of why there is a loss this quarter. We don’t want to guide conservatively that we never miss but was disappointed that we - and recognize that you’re disappointed that we missed. Our forecast was off for the first quarter, but our confidence hasn’t changed… Our confidence on the revenue environment hasn’t changed. To calculate available seat miles, you must multiply the available seats on a plane by the number of miles that plane will fly per flight. Total revenue includes not just ticket prices, but all money the airline makes. RASM = Total Operating Revenues/Available Seat Miles RASM stands for revenue per available seat mile and is calculated by: In short, Kirby says nothing here except that that the RASM forecast was incorrect. And just I recognize given that we missed the first quarter, how can we demonstrate that credibly. And if we look we didn’t share first half versus full year in our earnings call, but had we shared first half, RASM is actually a little bit above where it would have been. The bigger picture is the outlook looks really strong. But I think the bigger picture, while I hate that we missed it, everyone up here hates that we missed the forecast it’s not something we do often. we sure don’t want to do that ever again. And really, I think what happened in the first quarter is we should have had forecast for RASM in the first quarter.Īnd whether it’s seasonality has changed, it is a different environment. And we have a pretty good track record of not doing it. So I’ll let least start and address that issue head on, which I hate to ever miss guidance. Morgan 2023 Industrials Conference, Kirby immediately addressed the updated guidance and the looming loss: Speaking on a call with Chase analysts at the J.P. United Airlines CEO Offers Insights On Expected Q1 Loss Let’s review how United CEO Scott Kirby presented the updated guidance to investors. United Airlines updated its quarterly guidance to reflect a projection of loss in the first quarter.
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