Revenue
The company is seeing strong demand trends as leisure travel remains strong and the hybrid work model allows further flexibility for travel. United expects a strong revenue environment in the fourth quarter of 2022. The company expects TRASM in Q4 to increase 24-25% from the 2019 period on 9-10% less capacity. This is close to the third quarter number of a 25.5% increase on about 10% less capacity compared to Q3 2019.
Profits and margins
Analysts expect United to report EPS of $2.12 in Q4 2022. This compares to adjusted EPS of $2.67 in Q4 2019. In the third quarter of 2022, the company reported adjusted EPS of $2.81, which was down 31% from the same period in 2019. For the fourth quarter of 2022, United has guided for adjusted EPS of $2.00-2.25.
Adjusted operating margin was 11.5% in the third quarter of 2022. The airline expects adjusted operating margin in Q4 2022 to be about 10%, which is higher than the 9.1% reported in Q4 2019.
Costs
In the third quarter of 2022, cost per available seat mile, excluding fuel (CASM-ex) was up 14.5% from the same period in 2019. For the fourth quarter of 2022, the company expects CASM-ex to be up 11-12% compared to Q4 2019.
Click here to read the full transcript of United Airlines’ Q3 2022 earnings conference call