Categories Earnings Call Transcripts, Industrials

United Airlines Holdings Inc (UAL) Q4 2021 Earnings Call Transcript

UAL Earnings Call - Final Transcript

United Airlines Holdings Inc (NASDAQ:UAL) Q4 2021 Earnings Call dated Jan. 20, 2022.

Corporate Participants:

Kristina Munoz — Director of Investor Relations

Scott Kirby — Chief Executive Officer

Brett Hart — President

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Gerald Laderman — Executive Vice President and Chief Financial Officer

Analysts:

Conor Cunningham — MKM Partners — Analyst

Jamie Baker — J.P. Morgan — Analyst

Savanthi Syth — Raymond James — Analyst

David Vernon — Bernstein — Analyst

Helane Becker — Cowen and Company — Analyst

Duane Pfennigwerth — Evercore ISI — Analyst

Shiela Kahyaoglu — Jefferies — Analyst

Catherine O’Brien — Goldman Sachs — Analyst

Michael Linenberg — Deutsche Bank — Analyst

Andrew Didora — Bank of America Merrill Lynch — Analyst

Myles Walton — UBS — Analyst

Hunter Keay — Wolfe Research — Analyst

Alison Sider — Wall Street Journal — Analyst

Leslie Josephs — CNBC — Analyst

Justin Bachman — Bloomberg — Analyst

Dawn Gilbertson — USAToday — Analyst

David Slotnick — TPG — Analyst

Presentation:

Operator

Good morning and welcome to United Airlines Holdings Earnings Conference Call for the Fourth Quarter and Full-Year 2021. My name is Brandon and I’ll be your conference facilitator today. [Operator Instructions]

I will now turn the presentation over to your host for today’s call, Kristina Munoz, Director of Investor Relations and Kristina, you may begin.

Kristina Munoz — Director of Investor Relations

Thank you, Brandon. Good morning, everyone and welcome to United’s Fourth Quarter and Full-Year 2021 Earnings Conference Call. Yesterday, we issued our earnings release which is available on our website at ir.united.com. Information in yesterday’s release and the remarks made during this conference call may contain forward-looking statements that represent the company’s current expectations or beliefs, concerning future events and financial performance.

All forward-looking statements are based upon information currently available to the company. A number of factors could cause actual results to differ materially from our current expectation. Please refer to our earnings release Form 10-K and 10-Q and other reports filed with the SEC by United Airlines Holdings and United Airlines for more thorough description of these factors. Also during the course of our call, we will discuss several non-GAAP earnings measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables at the end of our release.

Joining us on the call today to discuss our results and outlook are Chief Executive Officer, Scott Kirby; President, Brett Hart; Executive Vice President and Chief Commercial Officer, Andrew Nocella and Executive Vice President and Chief Financial Officer, Gerry Laderman. In addition, we have other members of the executive team on the line available to assist the Q&A. And now I’d like to turn the call over to Scott.

Scott Kirby — Chief Executive Officer

Thank you, Kristina and good morning everyone, thanks for joining us today. Before I get into the details of our fourth quarter and how we’re thinking about the year ahead, I wanted to share some brief observations about the recent developments regarding the rollout of 5G. Mostly, I want to thank the White House Secretary, Buda [Phonetic] Jed and the CEO’s of AT&T and Verizon for finding and agreeing to an approach that mostly avoided would have been severe disruption capacitor and cargo operations in this country.

This wasn’t an issue created by the airline, every carrier follows the rules dictated by the FAA. Since we first heard from the FAA about this issue in November, United has been a 100% engaged to underscore the severe risk with the 5G rollout post aviation, but more importantly to bring people together and drive consensus around comments and solutions. And while we don’t have a final resolution quite yet, I’m confident we’ll get there. This problem has been resolved collaborative — can be — has been resolved collaboratively allowing a fulsome rollout of 5G without significant impact to aviation in 40 countries around the world and we can do the same thing here in the United States.

While I wish it had happened earlier, the good news is, we now have everyone engaged, the FAA, DoT at the highest levels, the equipment aircraft manufacturers, Airlines and the telecoms and I’m confident we’ll soon have a clear set of objective criteria that allow full rollout of 5G without significant impact to aviation. I’ll close this part of my comment by once again thanking the administration and Secretary Buda Jed but also in particular thank you the CEO’s of AT&T and Verizon for voluntarily agreeing to these near-term restrictions near major airport. With that, I’ll turn to discussing our results and outlook.

Over the last year, the United team persevered through the impact of COVID, but also made incredible progress laying the foundation for the future. Omicron is once again impacting the near-term, but as we’ve done since March 2020, we’re taking action on capacity and we remain confident in the long-term projections in spite of the near-term headwinds from Omicron. But before we discuss our results and outlook, I want to take a minute to thank and brag about all that the people of United accomplished in 2021, in spite of the historic challenges, United came together as a team to get through the worst crisis in the history of aviation and set ourselves up to be the world’s leading airline on the other side.

We saw our NPS improved by 30.0 versus 2019 and introduced United Next to grow the airline and improve the product for customers, but we also made unique, real and structural changes to our process and technology, which we believe is going to lead to best-in-class CASM-ex performance once we have the full fleet return to service. I think perhaps one of the least understood industry change is that United is expecting to exit 2022 at a CASM-ex run rate below 2019, an expectation that sounds very different than most others in the industry. It is a transformational competitive change. So while we can’t control the exact timing of course of COVID, we can improve the customer experience and control our costs and that puts us in a completely different competitive position to outperform in the future.

In the short-term however, we’re remaining responsive to the risk posed by the Omicron variant. Omicron is impacting demand in the near-term, but the biggest impact of Omicron fueled surge in COVID cases we’ve seen so far was on our people and it led to a significant disruption in our operational performance over the holidays. As travel this period has been, I’m particularly grateful that because of our vaccine requirement, we are no longer losing vaccinated employees to COVID and we still don’t have any vaccinated employees hospitalized. Our vaccine requirement has truly saved lives.

As we look to the remainder of 2022, Omicron is impacting near-term demand and we’re reducing our capacity as a result, but bookings continue to be strong for March and beyond and our base case remains a continued recovery in demand, including international and business. Gerry and Andrew will give you more specifics on what we’re changing this year on capacity, but the important point is, we remain confident on the long-term CASM-ex target and future of United. We believe and certainly hope that as a company and society, we are moving into the endemic stage of COVID, but we’ll continue to manage as we have throughout the [Indecipherable] and once again this quarter and be responsive to what actually happened instead of what we hope will happen.

I’ll close by once again thanking the United team, they’ve done amazing things since the crisis began and they’ve laid the foundation for United to be the world’s leading Airline going forward. And now I’ll hand it over to Brett.

Brett Hart — President

Thanks, Scott. I’d like to start by thanking our employees for their hard work in the quarter and the busiest travel season since the start of the pandemic, our team dealt with disruptions from weather events, changing international travel requirements and most recently the impact from the Omicron variant. With Omicron impacting both our employees and the rest of the country over the holidays, our team pulled together to serve our customers and we are grateful to them.

As Scott mentioned, this latest variant has caused the delay and the expected recovery and is having an impact on bookings in the first quarter. However, we remain confident that travel will rebound quickly as cases subside. We expect a strong summer and second half of 2022 consistent with our expectations pre-Omicron. While Andrew will outline the changes we’ve made in the near-term on capacity in just a moment, we are confident and committed to our 2023 and 2026 financial targets.

With our United Next network plans in mind, we look forward to hiring the next generation of United pilots. Next week, we’ll host a grand opening of our United Aviate Academy Goodyear Arizona. We’re excited about the role our world class pilot training facility will play in recruiting and preparing the next generation United pilots. In fact, we welcome the inaugural class in December, which consist of 30 students, 80% of whom are women or people of color.

In the near-term, we are making sure we are fully staffed as this is critical to executing our plan as the recovery takes hold. As difficult as the holidays were, we are returning to a normalized operation. We’ve taken additional steps to ensure that disruptions are minimized for our customers with capacity management and incentives regarding the current labor environment, while we have small pockets of hiring challenges those do not currently impact our ability to operate the mainline and not impacting our capacity planning for 2022.

We feel confident in our ability to achieve the level of hiring at United that supports the growth we are planning in the second half of 2022 and beyond. Despite Omicron’s recent impact, we’ve achieved the highest ever net promoter score in our history, which is undoubtedly due to the team service improvements and technological advancements that make flying with us easier than ever, a couple of examples. This year more than 760,000 customers have benefited from ConnectionSaver and the percentage of customers that have misconnected in 2021 is the lowest since the merger.

Our clubs in the US are back and we are ready for international travel to return as well, as this includes 6 Polaris lounges. We’ve made it easier than ever to order on-board with our PayPal QR Code. Also our expanded beer, wine and snack offering is now available on nearly all flights over 2 hours. Gerry will provide greater detail on our 2022 costs, but our 2022 budget incorporates the elevated inflationary pressures seen by the rest of the country and fully reflects the labor expense we expect to incur in the year.

Importantly, the changes in our fleet and mix of flying give us the confidence that we will reach CASM-ex below 2019 by the fourth quarter of this year, putting us on track to achieve our long-term cost goals in the United Next plan. While the macro environment delayed the recovery, we continue to act on additional initiatives towards our goal to become 100% green by eliminating greenhouse gas emissions by 2050. United is now the largest airline to invest in zero emission, hydrogen electric engines for regional aircraft, renewed equity stake in ZeroAvia, a leading company focused on hydrogen electric aviation solutions.

We also announced a second round of corporate participants in our Eco-Skies Alliance program. We believe each of these initiatives among others further solidifies United’s position as the industry leader and sustainability. With 2021 behind us, we are responding to the near-term volatility with areas of the business we can control, while continuing to invest in our people and product as we plan for United Next plan that will transform the airline in the coming years.

And with that, I will now turn it over to Andrew to discuss the global environment.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Thanks, Brett. Total revenue for the fourth quarter finished at the high end of our range and down 25% on 23% less capacity versus fourth quarter of ’19. TRASM in the quarter finished down 2.5% versus the same period. We’re pleased to reach the high end of our Q4 revenue guidance, but the Omicron variant did have around the 2.0 negative impact on TRASM results and has delayed the anticipated demand and revenue recovery by a few months.

Prior to Omicron, we were on track to deliver close to flat unit revenues in the fourth quarter of 2019 versus our fourth quarter versus 2019. Just as in recent quarters, our cargo operation again delivered a record quarter for United. Total cargo revenue for the quarter was up 130% in the fourth quarter of ’19 and finished the full year at $2.3 billion.

Fourth quarter royalty revenue and other revenue was up 3% in the — versus the fourth quarter ’19 to $518 million. Now turning to our first quarter outlook. Leisure bookings and demand for late February and March are largely on track with our expectations. However, Omicron disrupted close in leisure demand in January across most regions and cancellations did increase. Bookings and cancellations are now starting to return to normal.

Business demand fell sharply in January versus early December, given business demand tends to book closer to the travel, we remain optimistic that we’ll see a strong rebound as we progress through the quarter, although that clearly linked to the virus. Our revenue projections assume business demand rebounds by the end of February to where we were in early December are down approximately 40% versus the same period in 2019.

Leisure demand trends that we reserved for travel later in the first quarter of 2022 have allowed us to manage our yield quality successfully versus our experience with the Delta variant surge. As a result, we remain optimistic that Omicron’s impact while significant will be focused on January and February at this point, while we can’t say if there will be additional widespread variance in the future, what we can say is that our expectation is that Omicron and each possible future variant will have a smaller and smaller impact on our revenue over time as compared to the impact from the Delta variant.

We now expect total revenue in the first quarter of 2022 to be down 20% to 25% versus 1Q ’19 with capacity down between 16% and 18%. We have moderated our capacity plans in Q1 reflecting the anticipated lower demand in the near-term as a result of Omicron. Lower capacity in Q1 along with a more conservative outlook results in our latest full-year 2022 plan having lower activity than 2019. This is down from the 5% growth versus ’19 we expected back in October.

We’ve moderated our 2022 capacity by lowering aircraft utilization and delaying the return to service certain planes. Our grounded Pratt & Whitney 777 jets are now expected to fly again starting in March and then gradually re-enter service fully by November. We’ve also delayed the return of service of certain narrowbody jets into the second half of 2022 and lower the planned utilization levels of our regional jets for the remainder of the year addressing pilot shortages. These changes typical mainline aircraft — through these changes typical mainline aircraft utilization is expected to be well below normal until Q4 of 2022. The phasing in of this idle capacity particularly from larger jets and with lower utilization of RJ’s will have a measurable impact in our gauge, CASM-ex and overall ASMs for each quarter of 2022 which Gerry will detail shortly.

We also continue to expect that our international long-haul flying will enter a strong period of margin improvement versus the last cycle as we enter the second half of ’22. We expect that new capacity to Africa, India and the Middle East will mostly offset lower capacity to Asia for the foreseeable future. We continue to watch international demand carefully, but expect recovery and close in demand post Omicron. The booking curve for the Atlantic proved shorter than usual in 2021 and we expect to have a same record performance for 2022.

As of now bookings for the Atlantic for the peak travel season are on track and we’ve seen some relaxation of border controls to Israel and England. We are working closely with our global partners as we build back our international network and late last year, we announced a great new partnership with Virgin Australia. United is leading US carrier to Australia and we believe this partnership will allow us to quickly and more profitably resume our flight schedule to Australia.

We’re on track to create the best on-board product by introducing United signature interior. We’ve now taken delivery of 16 737 MAX with this interior. We’re also making progress on our plan to modify the remainder of our narrowbody jet, so that by early ’25, the entire mainline fleet will have this consistent superior look and feel.

Our future fleet will have an increased premium mix with premium seats per departure in North America, up 75% by 2026. It is worth noting that in the fourth quarter of ’19, we’ve already started to produce new records and ancillary revenue generated by seat upgrades by our leisure customers. This trend of selling more premium products to leisure customers represents a meaningful amount of potential upside to our United Next revenue plans and can also help fishing the impact of business traffic in the event it does fully return.

As the several of our largest competitors to reduce the size of their business by about 10% on global long-haul flights, we expect that to continue and as a result, there is a structural change that we see in the long-haul international service. Late in 2021, we are pleased to be recognized in the latest BTN survey completed by industry procurement leaders. These leaders clearly saw and rewarded our efforts to win their business separating United from the bulk of the industry.

We improved in every category and we believe these results signify the hard work we’re putting into win in ever-increasing share of their corporate business, which again is important tenant of our United Next plan. Thanks to the entire United team and with that, I’ll hand it off to Gerry to discuss our financial results and outlook.

Gerald Laderman — Executive Vice President and Chief Financial Officer

Thanks, Andrew. Good morning everyone and welcome to our first call in the New Year. While we all would have preferred to be further along in the recovery, you will see from our results for 2021 and forecast for this year that we continue to make great progress and are well positioned to achieve the long-term goals we’ve discussed with you since last June.

Turning to the numbers. For the full-year 2021, we reported a pretax loss of $2.6 billion and an adjusted pretax loss of $5.8 billion. For the fourth quarter of 2021, we reported pre-tax loss of $845 million and an adjusted pretax loss of $679 million. Our CASM-ex increased 13% on capacity down 23% both versus the fourth quarter of 2019. While CASM-ex was within our guidance range for the quarter, it was slightly higher than the midpoint as a result of Omicron related expense.

Looking to the first quarter of 2022, there were two major factors impacting our CASM-ex. First because of Omicron as Andrew mentioned, we are adjusting capacity downwards to align with demand, consistent with the agile pivoting we’ve done throughout the crisis. Secondly, we currently expect that our 52 Pratt powered 777 will mostly remain grounded through the first quarter. This reduction in flying keeps our aircraft utilization down about 16% in the first quarter versus 2019 and does drive additional cost inefficiency.

First quarter 2022 capacity is expected to be down between 16% and 18% with CASM-ex expected to be up between 14% and 15% versus the first quarter of 2019. The math associated with flying fewer ASMs than originally expected together with the added Omicron related expense is driving around 3 points of expected CASM-ex pressure in the quarter.

By the fourth quarter of 2022 however, our base case assumption is that we are past Omicron and flying a schedule with capacity up around 5% versus fourth quarter 2019. In this scenario, our utilizations would reach near 2019 levels if gauge up about 16% versus the fourth quarter of 2019 and up 11.0 versus the first quarter of this year, driven by the return of CASM friendly 777’s and the addition of 787’s and larger 737 MAX aircraft.

These factors together with the full run rate benefit of our identified $2.2 billion in structural cost reductions, which we expect to achieve by this summer with driving material change in our CASM-ex performance over the course of the year from up 14% to 15% in the first quarter to down around 2% in the fourth quarter this year in each case compared to 2019. As I mentioned, these figures represent our current base case assumption for our 2025 [Phonetic] but as Andrew outlined, we are committed to aligning and we will continue to be flexible given the uncertainty around the pace of recovery.

As a result of this uncertainty, we expect our CASM-ex results for the full year 2022 could fall anywhere in a range of scenario. You may recall in October, we set our plan capacity for 2022 would be up around 5% versus 2019, with CASM-ex lower than 2019. Our outlook on CASM-ex remain consistent with this prior outlook though since we now expect our capacity for the year to be below 2019 levels, we must adjust our CASM-ex to take into account the impact of fixed costs spread over fewer ASM.

To provide some further book in, if capacity for the year were about flat to 2019, we expect our CASM-ex would be up 2% to 3% versus 2019. The full-year 2022 capacity is 5% below 2019, we expect our CASM-ex will be up about 5% versus 2019. We believe our results will land between those figures on a full-year basis. Most importantly, we expect CASM-ex to improve throughout the year as our gauge and aircraft utilization materially improve in the second half and expect to end the year with CASM-ex below 2019 levels as I noted earlier.

Most importantly, the fourth quarter expected run rate for CASM-ex will put us well on track for United Next cost plan for 2023 and beyond. Turning to fleet, we currently expect to take delivery of 53 737 MAX aircraft and eight 787 aircraft during the year. As we noted on our previous earnings calls, the 787 aircraft were originally expected to deliver in the first half of 2021. We now no longer expect to take these 787 aircraft until after the summer of 2022 contributing to about 1.5 point less capacity versus our original plan.

Given this timing, we now expect our adjusted Capex in ’22 to be around $4.2 billion plus about $1.7 billion of adjusted Capex that moved out of ’21 into 2022 for a total of about $5.9 billion for the full-year. To be clear, our total adjusted Capex plan for the years 2021 and 2022 together have not changed since June of last year, there is simply been a timing shift driven by aircraft delivery delay. We continue to expect the use a mix of debt financing leases and cash to fund the acquisition of new aircraft depending on market condition or tracking towards our United Next leverage target.

Importantly, we ended [Technical Issues] over $20 billion in liquidity including our undrawn revolver, a strong cash position we continue to navigate the remainder of the crisis. In closing, I’d like to thank my Finance team as they have worked countless hours over the last two years to create and manage a flexible financial plan in response to a quickly evolving environment. We will continue to focus on appropriately managing our capacity and rebuilding our business back efficiently. We’ve observed that the impact of each variant on our business has decreased with each iterations and we continue to expect COVID-19 to become endemic in the future. We remain confident in our 2023 and 2026 United Next financial target and our trajectory to maximize earnings power through the long-term in the coming years.

And with that I’ll pass it back to Kristina to start the Q&A.

Kristina Munoz — Director of Investor Relations

Thank you, Jerry. We will now take questions from the analyst community. Please limit yourself to one question and if needed one follow-up question. Brandon, please describe the procedure to ask the question.

Questions and Answers:

Operator

Thanks, Kristina. [Operation Instructions] And from MKM Partners, we have Conor Cunningham. Please go ahead.

Conor Cunningham — MKM Partners — Analyst

Hey, everyone, thanks for the time. When we think about United and the opportunity set, that’s how do you international — the international landscape is clearly what people talk about the most as the pandemic looks to sputter out. Just curious on your expectations have changed for in terms of pent-up demand for International and clearly Asia is going to be going to take some time, but the European countries right now are starting to quickly ease restrictions as cases decline. I want to super bullish for this the Spring and summer demand timeframe. So just curious on how things have changed from a high level from your thought process.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Thanks, Conor. It’s Andrew. It’s really good question and it’s something we strongly believe and based on everything we’ve seen. We’ve definitely pointed a lot of incremental capacity across the Atlantic for this spring and summer in anticipation of this recovery. I can tell you in fact we’re booked ahead from a passenger and revenue perspective on those flights this spring and summer already. And so we’re ready to get flying and we do need to get pass this latest Omicron wave, but we feel really good about the future. And more importantly, we kept all of our wide-body jets in our fleet. We continue to modify them with the new business class cabins. So we have a consistent product across the range of our aircraft and we operates in the best gateways in the United States bar none.

So we do believe very strongly that there is tremendous international growth opportunity in front of us. We also believe that there has been significant structural changes, smaller business class cabin coming in from the United States and in fact fewer flights. Many of those larger A380’s and 747’s have been retired by our competitors and this sets us up incredibly well for the future year after that we can’t be — we’re very bullish about the Atlantic in particular.

And as you stated, Asia is going to be slower to come back. We look forward to coming back in full force, but we have redeployed our planes for the foreseeable future to other regions of the world, in anticipation of the slower recovery in Asia. So we think we have that from a revenue and P&L point of view under control as well. So, really bullish about the future when it comes to international growth and United’s potential and that we think is superior to all of our competition.

Conor Cunningham — MKM Partners — Analyst

Okay, great. And then when you embarked on the Mid-Con strategies and laid out United Next loyalty was a huge component of that and right or wrong I think a lot of investors view airline loyalty as just one big pie. So, just curious if you could talk about how new sign-ups or maybe unique sign ups have been for the loyalty program or credit card or if you have any conversion figures from other airlines that United has seen as the operations improve over the years and so on, so. Thanks. Thanks again for the time.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Sure. We signed a 5.6 million new Mileage Plus members this year, which is a record for the airline. We are really pleased by that initiative, the growth, then the prosperity in the program and people want to be part of that program and be part of United. So we don’t think it could be any better. In terms of credit card acquisitions, new accounts, we are up in the second half of this year versus where we were in 2019. So that’s going incredibly well as well. So we’re sitting, we’re really optimistic about those particular numbers. And in particularly with the new members, it’s just a few years ago we were doing 2.5 to 3 million new members per year and now we’re up to 5.6. I think it’s a great tribute to United where we apply our brand, our customers are more and more interested in joining the Mileage Plus program.

Operator

From J.P. Morgan, we have Jamie Baker. Please go ahead.

Jamie Baker — J.P. Morgan — Analyst

Hey, good morning everybody. So the strength in premium leisure is obviously an important topic, but there is some debate as to its sustainability where consumers permanently craving a better flight experience and therefore they’ll refuse to ever return to the back of a cabin or if it’s just a temporary phenomenon driven by pent-up demand. So to the extent that it is the former, are you seeing this elsewhere across the travel ribbon, I mean for example our club memberships showing commensurate strength, our new card acquisitions skewing to the Infinity card. I’m just wondering how broad the evidence is supporting the thesis that a large segment of your consumers are truly pursuing a better overall experience.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Well, Jamie what I think I would say is, we’re going to need some time to prove that out. I think it is somewhat debatable. We feel really good about it, I mean the numbers have been incredibly strong. Our seat product upgrades in this last quarter have never been higher andthat’s even before we begin to transform into the United Next fleet, which has more premium seats on board the aircraft. And we feel really strongly about the segments in our business and giving people a choice about where they want to sit on the airplane and what experience they want throughout the entire travel journey, everybody deserves that choice and we’re going to do it, we’re going to do it great.

In terms of club memberships, what I would tell you is the bulk of our club memberships come through our premium card through the co-brand portfolio. So it will be hard to measure that because we’ve introduced two new lower share card. So the numbers are skewed by our new gateway card for example. So it’s a little bit more difficult to simply answer that question right now, but we’ve now seen this for two quarters in a row, really strong premium leisure demand everything we see in the first quarter I would say the same is true.

And we also see that in the business class cabin going to and from Europe, where the performance there has been good. And the other thing I’ll tell you is that, well, clearly PRASM has been down throughout this crisis rather than domestically in our premium cabins is almost flat where the number in total, in terms of PRASM. So again that’s a remarkable number as we go through this crisis in terms of premium demand and might have been.

Jamie Baker — J.P. Morgan — Analyst

Well — thank you, Andrew. As a follow-up to that, so a question on pricing, it feels like the booking curve for consumers is increasingly similar to what corporate use to look like. So consumers are booking closer in, but it feels like business travelers are now booking further out. First, is that a fair characterization and two, do you think you can still achieve pre-COVID corporate yields, are sufficient fair fences in place or does a further booking corporate buyer imply lower yields, I guess that’s the question.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Some of that’s TBD to be honest, but what I would say is that business traffic is down substantially. It had improved quite a bit as we were in the quarter last year. And so the booking curves are I think a little bit unreliable from where will they be 2, 3 or 4 months from now. So I think we just have to wait a little bit longer than that and till demand and really demand comes back to some level of normalcy across all those channels, the yield calculations are just going to be a little bit differently.

What I would say is that particularly where business traffic and total business, our total traffic, we’ve seen a remarkable come back already and we through the year versus where we were and we one of the year for a total bookings and per business bookings. So we’re well on our way and I think we’re going to see things return to normal from a booking perspective. I would hope sometime in mid-February and cancellation rates early this week are actually already back to more or less 2019 standards. So, things have moved dramatically just in the last 2.5, three week.

Jamie Baker — J.P. Morgan — Analyst

Excellent. Thank you for the clarity, Andrew. Take care.

Operator

From Raymond James, we have Savi Syth. Please go ahead.

Savanthi Syth — Raymond James — Analyst

Hey, good morning. Just curious on the cargo revenue side that held in well and getting better than what you would have expected earlier in 2021. And there seems to be a lot of dedicated capacity coming on. So I’m not sure, it seems to be making up for lost belly space. I was curious if you — what you expect in terms of cargo revenue trend for this year and maybe if there is any kind of structurally something change longer-term?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Sure, I’ll try to take that. I think what we’re seeing is there has been a disruption in supply chains around the globe and so the use of air freight has increased or the need for it has increased relative to the amount of capacity available and that’s caused yields to go up. As we look into Q1, I think those trends are pretty similar. And in fact, we expect our Q1 performance this year to be in excess of our Q1 performance last year, but it’s still early in the quarter, obviously, driven by the strong yields. So and if you talk to our cargo team, they would tell you that these supply chain disruptions, the backups at the ports, these things look likely to continue to some degree for the foreseeable future as we head into 2022.

So we’re optimistic our cargo is going to have another great year and kudos to our entire cargo team because the numbers we are putting up relative to our competition are just staggering.

Savanthi Syth — Raymond James — Analyst

Fine. Along the lines of kind of something change in near-term like the cuts to service and kind of some of the small markets, small markets is a big push for United not long ago, do you see these kind of issue resolving itself as you get into 2023 or something or is there, is there a kind of a need to change strategy here at least when it comes to the regional operation of small market operation?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Sure, I’ll try to take that, I’m taking all the questions here, I need to hand out a few questions to my colleagues, but we first of all what I would say is that as we take away service from small communities, we’re disappointed to do that. We know the impact on these communities and we alert them ahead of time and we know it’s a big deal. And we’ve already cut service to 20 communities in the United States in the last few months. Again, we know that’s a really big deal.

However, we are facing pilot shortage on our regional aircraft, not on our mainline aircraft and we expect that pilot shortage to continue for a while, including for the rest of 2022. So we do expect unfortunately there’ll be a few more communities that we will have to remove from the network. We’re still working out those details and we have a lot of aircraft that we will under-utilize for the foreseeable future, but that’s kind of where we are.

In terms of our business plan, when we talked about the United Next business plan just about seven months ago, we had already kind of recognize these trends, we had already planned to reduce the number of RJs in our fleet and what’s happening is an acceleration of this plan. But from a revenue perspective, this is all going to count and for and unfortunately from internal plan and perspective, what we’re seeing on the RJ pilot shortage is an acceleration and what happens to the community we serve is an acceleration, but it is not unexpected for what we’re really going to deal with over the next year or two.

Savanthi Syth — Raymond James — Analyst

Sounds well. Well, thank you.

Operator

From Bernstein, we have David Vernon. Please go ahead.

David Vernon — Bernstein — Analyst

Hey, good morning, guys. Thanks for taking the time. Gerry, I wanted — I was wondering if you could help us think about kind of the exit rate accounts, it sounds like it’s going to be much better than the start of the year because of some gauge increases. Can you talk about sequentially how gauge is increasing and kind of that — what’s a good foundation on which to start building out a CASM outlook for 2023 because I know there is — the growth we’re getting sequentially in the volume recovery, just trying to separate out how much of that is not sort of volume-dependent, how much of that is coming out of gauge?

Gerald Laderman — Executive Vice President and Chief Financial Officer

So, good question. We’ve been clear since last June that one of the benefits that’s really in some ways unique to United with our United Next plan is the increase in gauge, We’ve been under gauged on the Mainline and the MAX order, particularly when the MAX can start next year, we’ll help solve that problem. So, we will provide going into next year additional color on gauge. This year just in the first quarter — the fourth quarter we expect 11% improvement in gauge and then more going into next year, but we’ll continue to give you those numbers, but as we’ve been saying for the last six months, one of the great advantages we have and one of the reasons why we’re so comfortable with our CASM guidance for next year is that as we said, it’s just math.

David Vernon — Bernstein — Analyst

Yeah, so sequentially as we go through the quarters, is there an inflection point when that gauge really kind of pops up tied to deliveries or schedule a chain?

Gerald Laderman — Executive Vice President and Chief Financial Officer

Yeah, so well two things, one the 777 won’t start impacting us until the second quarter and then the eight 787 they’re still hanging out there, that will be a second half as well as the 53 MAX’s, effectively all in the second half of the year, the vast majority in the second half of the year. So there is a huge difference between the first half and second half on gauge.

David Vernon — Bernstein — Analyst

All right, that’s super helpful. Thank you. And then one last one for me. The other Opex line kind of bumped up sequentially $225 million a quarter for the last few quarters. Are we a budget level of around 1.4 per quarter for that other Opex line or how should we think about that number? We’re getting to 80%, 85% of 2019 levels of cost on that line and I’m just wondering if there is structural takeout I would assume some of it’s in there like what absolute number for that other Opex lines we’ll be looking at for 2022 per quarter?

Gerald Laderman — Executive Vice President and Chief Financial Officer

Yeah, I think we’ve hit about the right run rate within couple hundred million dollars.

David Vernon — Bernstein — Analyst

Okay. Thanks a lot for the time guys.

Operator

From Cowen and Company, we Hele Becker. Please go ahead.

Helane Becker — Cowen and Company — Analyst

Thanks very much, operator. Hi everybody and thank you very much for the time. Should oil prices have gone up over $85 and I know there’s going to be a lot of fuel efficiency with the newer aircraft that are coming in, but how should we think about the way you’re thinking about fuel vis-a-vis pricing and the lag between the two?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Certainly and I’ll start. Traditionally, I think we have gotten to the point we were at a high degree of confidence that fuel is a pass-through and I’ve said that many times in the past and I continue to believe that. During the crisis with a slide demand equation quite at a balance I think that that has got out of balance, but as we look into Q2 and beyond based on what we think can happen to demand and where we see supply, hopefully those relationships come back in place and we’ll continue to make agile decisions on utilization of the fleet given what the price to fuel is like we always have done in the past.

So I feel like we need a little bit more time to prove back that the equation is still valid, but we’re well on our way.

Helane Becker — Cowen and Company — Analyst

Okay. And then my other question is, I don’t know how to think about this, but I know Asia traffic is not coming back anytime soon, but there is a lot of cargo that you can do in that market. So it makes sense to have capacity there, but when you think about what the Chinese are doing, I mean, I feel like they’re in violation of the bilateral agreement that they signed. And I’m kind of wondering if after if part of what they’re doing in not allowing you your full complement of flight, it has to do with the Olympics versus you know them being difficult with quarantine rules and still on, so that as you think about rebuilding Asia, China is not on the list of countries beyond maybe one or two cities and you think about like the rest of Southeast Asia. So, not sure who should answer that?

Scott Kirby — Chief Executive Officer

Well, I’ll start, Helane and then let Andrew talk about our specific plan. But what I would say is on the Asia restrictions, look governments around the world are all doing their best to manage COVID and those restrictions are constantly changing. They’ve had a different set of standards in China, different approach in some of the western, but I don’t think there is anything bigger in the region to it other than different countries are all dealing their way in an uncertain environment. So I would read any kind of macro deal vertical questions into it and then I will turn it back to Andrew to talk about for what are our plans for aircraft and timing are.

Helane Becker — Cowen and Company — Analyst

Thank you.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

The only thing I would add is that we recognize that Asia seems to be — will have a slower recovery and we have moved those aircraft elsewhere in the world and we believe they’re going to be really productive where we move them to. And we look forward resuming our full schedule to Japan and China at some point in the future when we can.

Helane Becker — Cowen and Company — Analyst

Okay. Well, thank you very much.

Operator

From Evercore ISI, we have Duane Pfennigwerth. Please go ahead.

Duane Pfennigwerth — Evercore ISI — Analyst

Hey, thanks so much. Good morning. Wanted to ask you a couple of questions, one just on changeability which is probably where the industry was headed anyway and you can refresh our recollection there, but obviously we’re in a weird time still, it’s improving but it’s weird time, but there is an impact on operations and perhaps call center resources and things of that sort with respect to changeability. So are you guys thinking at all about that kind of over the intermediate term again in a more normal demand environment, is some of the pure kind of frictionless changeability may be too much of a strain to support?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Well, I think the way I would describe that is, we’ve made a number of changes as we’ve dealt with this crisis, including the elimination of change fee themselves. And that we think was the right thing to do. We should have done it years ago quite frankly, we wish we had done years ago. And so we don’t think that’s going to change or at least United, we are where we are and we’ve adjusted our resources to make sure we can deal with that. Our customers now have the ability to make more changes than they did in the past and are doing so. And we’re kind of we’re pleased with what happened and we think it’s a great feature for us and it’s going to help us with our relative competitive stance versus other carriers in the country, which again you need renew long ago.

It’s about time and we’re fully committed to it.

Duane Pfennigwerth — Evercore ISI — Analyst

Appreciate those thoughts. I wondered if there wasn’t maybe a fair category or something like that not that you tell me now in advance, but maybe a fair category where it didn’t make sense. And then just a follow-up to Savi’s question on the regional constraints. Do you have any anecdotes, I mean, some markets are going to be no longer addressable, but do you have any anecdotes of markets that you maintain where you’ve sort of swapped it out, does it by default imply lower frequency or does it push into some new markets, if you could just talk about that more broadly, maybe from a network perspective?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

I don’t think it pushes us into new markets, but as we’ve classify this there are places that have fewer flights and there are unfortunately places that have no flights. And we continue to adjust the formula. Again, for the most part we anticipated this, the big difference here is this is occurring at a faster pace than maybe we anticipated 6 to 9 months ago. So it’s just accelerating our United Next plan and we’re going to go to, but there will be communities that unfortunately don’t have United service in the future. And there will be communities that have fewer flights and there will be communities that have fewer flights with bigger aircraft and that’s kind of the outlook.

We don’t, again I said it a few minutes ago, we don’t expect this to really materially improve in 2022 and we’ll see where we go in 2023.

Duane Pfennigwerth — Evercore ISI — Analyst

Thanks so much.

Operator

From Jefferies, we have Sheila Kahyaoglu. Please go ahead.

Shiela Kahyaoglu — Jefferies — Analyst

Good morning everyone, thanks for the time. Maybe if we could best think about your United Next targets. I know they’re far out, but how do we think about the inflationary expectations you’re baking into those targets and how they’ve changed over the past six months?

Gerald Laderman — Executive Vice President and Chief Financial Officer

Well Sheila, it’s fair to say that over the last six months we’ve seen more inflationary [Technical Issue] than we might expected a year ago. That’s incorporated in our numbers and our guidance for this year on their comfort for next year. So we’ve taken that into account. And in terms of where we’re seeing those inflationary pressures, we’re no different I think than anyone else, clearly on the vendor side Airport vendors, we’re seeing that other suppliers like everybody else and you go to the supermarket, you’re seeing higher food prices, we’re seeing higher food prices, but we’re managing through all that. And I can tell you that on our flights as beef becomes too expensive, we always have chicken.

Shiela Kahyaoglu — Jefferies — Analyst

Okay, thank you.

Operator

From Goldman Sachs, we have Catherine O’Brien. Please go ahead.

Catherine O’Brien — Goldman Sachs — Analyst

Hey, everyone. Good morning, thanks for the time. So, I know there are range of outcomes on your capacity for this year, that’s going to be based on demand, but should we still be thinking about international being the bigger driver as you get back to growth mode later this year. So like if we end up with flat capacity, which is one of your book and should we expect domestic to be down underlying that? Thanks.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

You know I will say, the plans are still agile. We are going to fly less International than we expected to just a few months ago. We’re also going to fly less domestic weather in the 100% proportion of each other. I think it’s just too early to tell. So I’m going to refrain from giving you an exact answer to that question.

Catherine O’Brien — Goldman Sachs — Analyst

Okay, got it. Fair enough. And then just on the forward demand outlook, I don’t want to read too much into your words, I think in the release you said you’re optimistic about Spring and excited about summer, should we read this as you’re seeing bookings come in stronger than what you’re seeing for Spring maybe consumers are just more optimistic about COVID the time we get the summer or are just want to hear kind of like how the bookings are looking right now maybe over the next four, five months based on what you’ve got on the books today. Thanks so much.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Sure, I’ll give it a try. What — the first thing I’ll say is that when the Omicron spike happened that what really happened was cancellation seat particularly for close in travel and net bookings declined as a result of that, the total bookings also declined as a result of that. But all of that impact was really both close in and not far out. And so we are continuing to book March for example normally throughout the entire Omicron process including from the perspective of our yields to be one and that continues all the ways beyond March all the way should summer where for example we look at the Atlantic, we’re booked ahead from a passenger count and we’re booked ahead from a revenue perspective, which means our PRASM is obviously positive in the future quarters for the Atlantic.

So all that is really good. What Omicron did is caused a spike in near term cancellations and reduction in near-term bookings particularly for business travel. And what I can tell you over the last few weeks, we’ve already seen that start to come back in the line. For example in week 1, we were down 48% versus 2019 for total bookings, in week two this year we’re down 40% and now in week three week-to-date we’re down 25%.

And so we are seeing this really come back very quickly. And the second point as I said earlier, our cancellations are also now coming back into normalcy. So this really again there is a hole in January that we can’t, we can’t fill because it’s just too close in and there’s a bit of a hole in February as well, but March looks normal at this point and definitely beyond that based on these trends. And again bookings are coming back really, really quickly. Hopefully, we will be back to somewhat of a normal stance or at least where we were in the middle of the Q4 quarter sometime by the middle of February.

Catherine O’Brien — Goldman Sachs — Analyst

Okay, great.

Operator

From Deutsche Bank, we have Michael Linenberg. Please go ahead.

Michael Linenberg — Deutsche Bank — Analyst

Yeah, hey, thanks everyone, two’s here. One, can you just refresh us on your hiring plans for 2022 more specifically number of pilots and mechanics. And how is the ramp, is it spread throughout the year, is it front-end loaded. Thank you.

Brett Hart — President

Hi, Mike, it’s Brett.

Michael Linenberg — Deutsche Bank — Analyst

Hey, Brett.

Brett Hart — President

Hey, look first I would say from the back of this year, we are really successful in meeting our — a lot of our hiring goals and obviously we think we have no issues in particular on the mainline next year moving those goals. In terms of pilots for instance in back half of this year, we hired approximately 1200 pilots. So now we think that trend will continue into the next year. Overall numbers for next year, we expect to be in line with our needs, but we haven’t put out specific numbers at this point in time.

Michael Linenberg — Deutsche Bank — Analyst

Okay, great. Thanks, Brett. And then just quickly, Andrew, when — I saw the guidance the release the March quarter revenue sort of what you were guiding to relative to others. It was good, it looked more favorable given that the March quarter historically has been seasonally much more challenging for you than your competitors, is that reflect maybe network changes over the last year, is it cargo driving a bigger piece ancillary all the above really, really curious what’s allowing you to kind of catch-up and at least narrow the gap with your competition. Thank you.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Thanks, Mike. I will say that improving our relative results in Q1 has been one of our long-term goals for many, many years. Obviously, there’s a lot going on, a lot of moving pieces in Q1 of this year, but all of those factors you just said and all of us here at United kind of working together to move these things around has made an impact really. I wish the Q1 guidance could be dramatically higher, but we are where we are, but I think we’re on the right path for long-term and we’re particularly on the right path making our Q1 results less of a gap to our competitors. And that of course will overall help us close margin gaps in the future because we do pretty well in Q2, our Q2 and Q3 given our global long-haul nature and our East-West nature here domestically.

Michael Linenberg — Deutsche Bank — Analyst

Great, thank you.

Operator

From Bank of America, we have Andrew Didora. Please go ahead.Hey, good morning everyone. Just kind of wanted to go back to the regional pilot issue and then a little bit of a different question as if the regionals are had or experiences how much shortages, do you expect this to eventually — could this potentially creep into your mainline hiring plans, particularly given the kind of the growth that you guys have ahead of you? And if it did creep its way in, would that be a risk to some of your longer-term CASM target?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

May be, I’ll give it a try. At this point, we’ve had absolutely no trouble hiring for United mainline pilot jobs. And the second point is, we are working very hard to make sure that the supply of pilots coming into this great business increases and given where salaries are, the career potential, we’re confident that’s going to happen and of course one of the things we’ve done which is highlighted a lot is our Aviate Academy, we’re bringing new students many then diverse into the United Airlines world, very, very early in the process.

And so we’re all working to make sure that there is plenty of pilots for the long-term supply, which we think is the case, but we do have a year or more where this needs time to get back into proper balance. And at this point, we haven’t seen any impact to our mainline hiring abilities.

Andrew Didora — Bank of America Merrill Lynch — Analyst

Got it. I guess as a follow-up to that, what do you think it’s easier to hire into mainline and into the regional just basically pay scales, just curious what the — kind of what that disconnected?

Scott Kirby — Chief Executive Officer

Well, I’ll take a shot at it, Andrew, you’ve done a great job there I think call by the way, appreciate it.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

I want you to take a shot at it.

Scott Kirby — Chief Executive Officer

Look, I think this is an important point and the big difference for us at the mainline is that at United we create careers, they’re not just job. Our average flight attendant ramp worker, gate agent into back in, in a full, in a normal year won’t say at the top of the seniority scale, union contracts makes the six-digit income and make it six digit income with great benefit. It’s one of the few jobs that few places that their job is left, where you can support a family and your kids to college and have great benefit that have security.

And I think at the end of the day that’s the reason that we can hire at the mainline is because we create careers where people can spend their whole career here instead of just what’s the hourly rate today.

Andrew Didora — Bank of America Merrill Lynch — Analyst

Thanks, Scott.

Operator

From UBS we have Myles Walton, please go ahead.

Myles Walton — UBS — Analyst

Thanks. I think there was a comment I know Scott on TV’s you said second quarter you’re targeting profitable or hope to be profitable. I’m just curious, do you think for the full-year you have line of sight for pre-tax profitability. And then maybe, Scott, while answering that if you’re answering, one of the first things that Russia did has done in previous instances with respond to sanctions is shut down their airspace, obviously you get some limited capacity going to Asia at this point. So maybe it’s not that big a deal, but relative to your plan for ’22 how disruptive could that be? Thanks.

Scott Kirby — Chief Executive Officer

So on the first question, I tried at least on CNBC to say, our — we’re trying to get out of the business of short-term in the short-term ups and downs of COVID because we haven’t been very good at it. We’ve been really good at the trajectory, but it’s impossible to predict what’s going to happen in the very short-term, but if we continue on the trajectory that Andrew described where bookings went from down 48% the first week, down 25% this week are on back on track to be profitable in both in the second, third and fourth quarter.

It’s probably getting to too fine a point to try to add up which I guess is what you’re asking, if I add up the second, third and fourth quarter are those a number that’s greater than the loss in 1Q, that’s probably too fine a point for me to have confidence in forecasting at this point. On the Russia point, I’m not going to speculate on that. Yeah, we’ll continue, we — United as the flag carrier for the United States lines up being exposed in a good way exposed in a bad way to geopolitics around the world.

And so we follow them closely and patent to them and have a good history responding when something happens, but we’re like everyone keeping a close eye on the situation in Ukraine and how it develops.

Myles Walton — UBS — Analyst

Okay, thank you.

Operator

From Wolfe Research, we have Hunter Keay. Please go ahead.

Hunter Keay — Wolfe Research — Analyst

Hey, good morning. Just to be [Indecipherable] fair, are you still reiterating the 9% pre-tax margin the CASM-ex down 4 for ’23 and also the 4% to 5% capacity CAGR for next year?

Gerald Laderman — Executive Vice President and Chief Financial Officer

Hey, Hunter, Gerry. Yes, we’re confirming all that.

Hunter Keay — Wolfe Research — Analyst

Okay. Got it. Thank you. And then let’s think about the premium feature adding, I think you said it was going to be like 60% or something like that, but I think most of your top corporates were tech customers flying to Asia, you could argue that both tech and Asia are going to be the most likely sort of challenged segments to come back geographically and line of business where we’re going to call it, how do you square that and does it mean maybe fewer widebodies to FFO forever or is it just more like a timing issue in your mind?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Well, Hunter forever is a long time, so I don’t think I can agree to forever. Clearly for the foreseeable future, we anticipate having a smaller footprint across the Pacific and those airplanes being redeployed elsewhere where they can be more productive for the business. So that’s going to continue for a while and when things change in Asia, we’ll be ready to bounce back there. We have great partners in Asia, particularly with ANA in Japan and Air China in China.

So we’re ready to go when demand returns, but it’s difficult to predict. There is no doubt, we did well in the business class cabin to Asia. But I can tell you we did, we did just as well across the Atlantic and to South America. It’s one of our, one of our strong suits. And so we feel bullish that Asia is definitely going to be tamed for the next few years from the United Airlines capacity perspective, but we’re going to redeploy that capacity where it can be fruitful for the business and fruitful in particular in the business class cabin. And again as I said earlier, we’re seeing smaller widebody jets being used by our primary competitors across the globe. And so that brings in not only less capacity in total, but significantly less capacity in the business class cabin. So as you try to square a circle that has many different movements to it what I would tell you is that capacity and demand is all moving and there are plenty of scenarios out there where business traffic across the Atlantic could be less than 100%, but if supply is dramatically less than 100%, it may it should all work out.

Hunter Keay — Wolfe Research — Analyst

Okay, thank you.

Operator

Thank you. This concludes the investor part of our our Q&A. At this time, we will now take questions from the media. [Operator Instructions] From Wall Street Journal, we have Al Sider. Please go ahead.

Alison Sider — Wall Street Journal — Analyst

Hi, thanks so much. I’m just curious talking about the issues with the regionals and the pilot shortage there. How are you thinking about kind of the financial health of all your regional carriers, this is something they can all survive or do you anticipate any consolidation or any kind of financial turmoil there?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Alison, it’s Andrew, I’ll let our regional carriers speak for themselves on their financial situation, I just I can’t respond to that.

Alison Sider — Wall Street Journal — Analyst

And I mean, I guess, just you mentioned sort of not having any trouble hiring pilots at the mainline level, but how about training, are you seeing any kind of log jams or delays in the training process? And are you seeing any issues in your pipeline for mechanic?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

From a training perspective, we have our Flight Training Center in Denver, Colorado and I’ll let Brent speak to it, but I think things are really well under control there.

Brett Hart — President

Yeah, we’re not, we’re not seeing any issues with respect to the training process and just to emphasize again, we’re certainly not seeing any issues on the hiring side. So we don’t anticipate any issues with respect to any hiring across the board that we need to make in order to stay on plan with our mainline operation.

Alison Sider — Wall Street Journal — Analyst

Thanks.

Operator

From CNBC we have Leslie Josephs. Please go ahead.

Leslie Josephs — CNBC — Analyst

Hi, good morning everyone. I mean if there are any incentives that you’re having to offer around the country in various port through th through track workers and if there are any markets that are getting higher wages or signing bonuses where are those and where do you see that trend going throughout the year?

Brett Hart — President

Yeah, hi, this is Brett Hart. We are taking it market-by-market and certainly we are seeing some parts of the country where there is some more difficulty in small pockets for hiring and we’re making necessary adjustments in those, in those markets. But our approach is to take it and just that way we determine what needs to be done in a specific market. We’re trying to maintain consistency across our organization, we understand it, there are different macro and micro economic factors at play and we’re adjusting those at this time we can call out specific markets, I mean I think that we’re being impacted in the same way that other employers are both in our industry and quite frankly across other industries and that information is — it is pretty readily available.

Leslie Josephs — CNBC — Analyst

Okay, thanks.

Operator

And from Bloomberg, we have Justin Bachman. Please go ahead.

Justin Bachman — Bloomberg — Analyst

Yeah, hi, thanks for the time. This might be a question for Gerry, I’m not sure, but as far as the full year capacity plans, I’m wondering if you could discuss a little bit about where the various buckets of that are coming from in terms of the regional pilot issues, the variant demand issues, Boeing 787 delays and those sort of things being pushed back. Could you sort of discuss which areas are contributing to that and in what ways. Thanks.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

So, Justin, it’s Andrew, I’ll try, I’m not sure if I completely understand the question. There are a number of categories that cause us to be off from the original 5% guidance for 2022. The first one of those is demand and the fact that the Omicron variant has that has kind of hit the industry as you know. And so we just, we needed take them back to — we have a plan to reflect that and we’ve done that.

So when you look at the different categories that would have and I don’t have a slide in front of me that has the numbers, but I have a slide somewhere that does is the 777’s, 52 [Indecipherable] aircraft, those 777’s that are grounded normally represent about 10% of our business in total. And so they’re going to be flying in full force in Q4 this year versus flying in full force for the first three quarters. That’s a big deal.

The second one is, we’ve delayed the return to service of a bunch in narrow bodies that we have in storage, I don’t have the exact number, but I think in Q4, it was in the neighborhood of 50 or so aircraft and in Q1 it’s slightly lower than that number, but still a really significant number. So that’s also a big category in terms of ASM’s.

Third the regional jets because they are smaller aircraft that fly short distances, when we measure those in terms of ASMs, their impact on capacity plan is actually quite, quite small. And then beyond that we just have lower utilization again to reflect demand environment. So those are three I think of the larger buckets and unless somebody else as a category I miss and I think that’s how I describe that. Does that answer your question?

Justin Bachman — Bloomberg — Analyst

Yeah, I know that’s kind of what I was hoping to hear about. Thanks a lot, Andrew.

Operator

From USAToday, we have Dawn Gilbertson. Please go ahead.

Dawn Gilbertson — USAToday — Analyst

Hi, good morning, Andrew, I know you rather talk about Polaris, but a broad swath of travelers out there are on a budget and slide basic economy. I wondered if you could give an update on the trends you’re seeing in basic economy. It’s been a while since you released any kind of figures unlike what percentage of bookings are in basic economy and I’m wondering whether that’s changed at all, since the pandemic waivers listed and they are no longer intangible. And related to that, I wonder if you guys have any plans like Delta did to extend travel credit beyond the current deadline? Thank you.

Andrew Nocella — Executive Vice President and Chief Commercial Officer

Good to hear your voice, Dawn. Well, I think what I would say is throughout the crisis, the basic percentage of tickets sold has varied significantly at United and today it’s somewhere in the high single digits domestically. During the crisis, it got as low as 4% and before the crisis, it was well over 20%. And so this number is moving around based on all kinds of different things, but as a result, it is a — as we speak today, it is a much smaller percentage of our ticket sales in our domestic system than it has historically been pre-crisis.

And I think that’s really all I can say. In terms of the tickets, we are evaluating that now, I’ll have more to say about that in the future, but our tickets are currently valid through the end of this year. So people still have a ton of time out there to find their credits and burn them on United Airlines.

Dawn Gilbertson — USAToday — Analyst

Thank you very much.

Operator

And from TPG, we have David Slotnick. Please go ahead.

David Slotnick — TPG — Analyst

Good morning, thanks for the question. I have a question about the international routes that you finance the five new routes, I think it was earlier in the fall. What kind of bookings are you seeing on that so far and are they checking with international bookings overall or are they a little bit off from the main?

Andrew Nocella — Executive Vice President and Chief Commercial Officer

I’ll take that, so international bookings across the Atlantic are — for travel April and beyond are ahead of 2019 levels and all of our new markets are exactly at their expectation. I will say that each new market has a different booking curve depending on where we’re going and each of those new markets is running on the booking curve we expected. We really have not seen the virus Omicron in particular impact our long-haul demand across the Atlantic at this point for our future travel.

David Slotnick — TPG — Analyst

Okay, thanks. And then just a follow-up question to the 5G questions from earlier. There have been a handful of regional traffic that have been affected at least even today there is a couple of I believe United ExpressJet that went from — had to divert from San Francisco to Reno. Do you anticipate a continued impact on the network just from the RJ issues?

Scott Kirby — Chief Executive Officer

I think there’s a lot yet to be determined. There are modest impact still from the rollout of 5G, they’re not nearly as significant as they were scheduled to be without the agreement that was reached, but more to come, it’s still very real time. We will work hopefully with the telecoms and the FAA through the whole process to further reduce the impact, but don’t know the full answer yet.

Operator

Thank you, ladies and gentlemen. We will now turn it back to Kristina Munoz for closing remarks.

Kristina Munoz — Director of Investor Relations

Thanks everyone for joining the call today, please contact Investor and Media Relations if you have any further questions and we look forward to talking you next quarter.

Operator

[Operator Closing Remarks]

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WMT Earnings: All you need to know about Walmart’s Q1 2023 earnings results

Walmart Inc. (NYSE: WMT) reported its first-quarter 2023 earnings results today. Total revenue rose 2.4% year-over-year to $141.6 billion, beating market expectations. Revenue growth was 2.6% in constant currency. Consolidated

Take-Two Interactive (TTWO) Q4 earnings decline, revenue up 11%

Gaming company Take-Two Interactive Software, Inc. (NASDAQ: TTWO) announced fourth-quarter 2022 results Monday after the closing bell, reporting an 11% revenue growth. Fourth-quarter revenues rose to $930.0 million from $839.4

Pinterest (PINS): Here are a few points to keep in mind if you have an eye on this stock

Shares of Pinterest Inc. (NYSE: PINS) stayed in green territory on Monday. The stock has dropped 40% year-to-date and 62% in the past 12 months. There is a mixed sentiment

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