United Airlines Holdings, Inc. (“UAL”), the holding company whose subsidiary is United Airlines, Inc. (“United,” and together with UAL, the “Company”), is providing an update regarding its
United Airlines Holdings, Inc. (“UAL”), the holding company whose subsidiary is United Airlines, Inc. (“United,” and together with UAL, the “Company”), is providing an update regarding its financial outlook for the first quarter 2023. Due to the factors described below, the Company now expects an adjusted diluted loss per share1 of between $0.60 and $1.00 in the first quarter 2023.
The Company has determined that it is appropriate to accrue expense in the first quarter 2023 related to a potential new collective bargaining agreement with employees represented by the Air Line Pilots Association. This accrual represents a shift in the timing of the associated expense from the second quarter 2023 into the first quarter 2023. With this accrual added to the first quarter, the Company now expects first quarter 2023 CASM-ex2 to be flat to up 1.0% year-over-year. For the full year 2023, the Company continues to expect CASM-ex2 to be approximately flat versus full year 2022, which includes the full-year expected impact of all anticipated new labor contracts.
The Company continues to see a strong demand environment and now expects first quarter 2023 total operating revenue to be up approximately 51% versus first quarter 2022, higher than the Company’s initial approximately 50% expectation provided in January 2023. Higher capacity in the quarter is contributing to better top line revenue performance as the Company’s operational reliability continues to lead the industry. Due to better completion rates, first quarter 2023 capacity is now expected to be up around 23% versus first quarter 2022, three points higher than the Company’s previous expectations.
While all months of 2023 are expected to produce unit revenue significantly above the corresponding months in 2019, the Company is observing new seasonal demand patterns, with lower-demand months such as January and February 2023 growing less than higher-demand months. As a result of this seasonality shift and the higher completion factor, the Company now expects total revenue per available seat mile (“TRASM”) for the first quarter 2023 to increase between 22% to 23% versus first quarter 2022, below its original guidance of up approximately 25%. However, the second quarter is expected to benefit from this seasonality shift, with current booked yield and revenue substantially higher relative to those in 2019 at this point in time. As a result, the Company’s outlook for the second quarter 2023 has improved, with total operating revenue now expected to be up in the mid-teens versus second quarter 2022.
Oil prices and crack spreads have remained elevated as compared to the forward curve used for previous guidance of $3.19 per gallon3 for the first quarter 2023. As a result, the Company now expects a first quarter 2023 average fuel price per gallon3 of between $3.31 and $3.41.
The Company continues to expect a full year 2023 adjusted pre-tax margin4 of approximately 9% and full year adjusted diluted earnings per share1 of $10 to $12.