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UA Announces Q1 2021 Financial Results 19 April / Conference Call 20 April

UA Announces Q1 2021 Financial Results 19 April / Conference Call 20 April

Old Apr 19, 21, 2:03 pm
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UA Announces Q1 2021 Financial Results 19 April / Conference Call 20 April

United Releases First-Quarter Financial Results - Rebounding Demand is Driving Clear Path to Profitability

Expects positive adjusted EBITDA margins* later this year
Achieved highest customer satisfaction in history in the first quarter

CHICAGO, April 19, 2021 --
United Airlines (UAL) today announced first-quarter 2021 financial results. The company has its eyes on the future, making continued progress on its commitment to remove $2 billion in structural costs and investing in key customer programs that will position the airline to capitalize on the recovery of business travel and long-haul international demand.

Following its return to positive core cash flow1 in the month of March, the company is focused on returning to positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins, even if business and long-haul international demand remain as much as 70% below 2019 levels. United is already moving to capitalize on emerging pent-up demand for travel to countries where vaccinated travelers are welcome. In fact, the company announced new international flying to Greece, Iceland and Croatia earlier today, subject to government approval. These opportunistic steps help position United to return to positive net income even if business and long-haul international demand only returns to about 35% below 2019 levels.

"The United team has now spent a year facing down the most disruptive crisis our industry has ever faced and because of their skill and dedication to our customers, we're poised to emerge from this pandemic with a future that is brighter than ever," said United Airlines CEO Scott Kirby. "We've shifted our focus to the next milestone on the horizon and now see a clear path to profitability. We're encouraged by the strong evidence of pent-up demand for air travel and our continued ability to nimbly match it, which is why we're as confident as ever that we'll hit our goal to exceed 2019 adjusted EBITDA margins in 2023, if not sooner."

United's efforts to improve the customer experience resulted in the company achieving its highest ever customer satisfaction in the first quarter. Looking ahead, the company is planning continued investment in customers, including continuing the United Polaris® retrofit program and starting retrofit on narrowbody aircraft, modernizing gates, upgrading and expanding United Club℠ locations in Newark and Denver, and rolling out tools that give customers the opportunity to pre-order onboard meals.
* Adjusted EBITDA margin is a non-GAAP financial measure calculated as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), excluding special charges and unrealized (gains) losses on investments, divided by total operating revenue. We are not providing a target or a reconciliation to profit margin (net income/total operating revenue), the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts. Adjusted EBITDA margin does not reflect certain items, including special charges and unrealized (gains) losses on investments, which may be significant. For a reconciliation of adjusted EBITDA to net income for the three months ended March 31, 2021 and 2019 and the 12 months ended December 31, 2020 and 2019, please see the accompanying tables to this release.

First-Quarter Financial Results
  • Reported first-quarter 2021 net loss of $1.4 billion, adjusted net loss2 of $2.4 billion.
  • Reported first-quarter total operating revenue of $3.2 billion, down 66% versus first-quarter 2019.
  • Reported first-quarter operating expenses down 49% versus first-quarter 2019, down 34% excluding special charges.
  • Reported first-quarter 2021 ending available liquidity3 of $21 billion.
  • Reported first-quarter capacity down 54% versus first-quarter 2019.
  • Reported first-quarter average core cash burn of $9 million per day, an improvement of about $10 million per day versus the fourth-quarter 2020.
Second-Quarter 2021 Outlook
  • Based on current trends, the company expects second quarter 2021 Total Revenue Per Available Seat Mile (TRASM) to be down approximately 20% versus the second quarter 2019.
  • Expects second quarter 2021 capacity to be down around 45% versus the second quarter 2019.
  • Expects second quarter operating expenses excluding special charges4 to be down approximately 32% versus the second quarter 2019, with second quarter 2021 fuel price per gallon estimated to be approximately $1.83.
  • Expects second quarter 2021 adjusted EBITDA margin5 of around (20%).
Key Highlights
  • Set a new diversity goal and plan for 50% of the 5,000 students the airline has committed to train by 2030 at the new United Aviate Academy to be women and people of color.
  • Created the Eco-Skies Alliance℠, a first-of-its-kind program, offering United's corporate customers the opportunity to help reduce their environmental impact by allowing them to pay the additional cost for sustainable aviation fuel (SAF). Additionally, United is giving customers the ability to contribute funds for additional SAF purchases by United or for use on initiatives United believes will help decarbonize aviation – the first of any U.S. airline to do so.
  • Launched industry-exclusive "Travel-Ready Center" to ease the burden of COVID-19 travel restrictions. Customers can review COVID-19 entry requirements, find local testing options and upload any required testing and vaccination records for domestic and international travel, all in one place. United is the first airline to integrate all these features into its mobile app and website.
  • Announced an agreement to work with air mobility company Archer as part of the company's broader effort to invest in emerging technologies that decarbonize air travel rather than relying on traditional combustion engines.
  • Returned to John F. Kennedy Airport after a five-year absence, and are now operating direct service to the airline's West Coast hubs – Los Angeles International Airport and San Francisco International Airport.
  • Announced a new luxury bus collaboration for customers to travel to Breckenridge and Fort Collins, Colorado with convenient year-round ground transportation service connecting through its Denver hub. This is the first time Breckenridge has ever been served by an airline and will be Fort Collins' first global network carrier service in 25 years.
Taking Care of Our Customers
  • The only airline that lets customers upload travel documents to the United app and have them certified allowing customers to get their boarding pass before arriving at the airport.
  • Announced plans to introduce United Premium Plus® service on seven Hawaii routes to Honolulu (Oahu), Kahului (Maui), and Kona (Hawaii) beginning in May 2021.
  • Expanded COVID-19 testing and pre-clearance program to make Hawaii travel easier.
  • Reducing stress of international travel by starting a test on Houston to Brazil flights, allowing customers to take an Abbott BinaxNOW test prior to their re-entry into the United States.
  • In partnership with the Centers for Disease Control and Prevention (CDC), launched a program to collect information from passengers, allowing them to be contacted in the event they are near a Covid-19 positive passenger while on a United aircraft.
  • Expanded rollout of virtual, on-demand customer service, now available at all U.S. hub airports.
  • Recognized by the Airline Passenger Experience Association (APEX) and SimpliFlying for providing a hospital-grade standard of cleanliness and safety during the travel journey. United is the first airline among the four largest U.S. carriers to receive the highest possible certification.
Reimagining the Route Network
  • In the first quarter, announced 41 new domestic routes and two new international routes and launched six domestic routes and four international routes, with 13 more international routes planned to launch in 2021.
  • The company resumed nonstop service on 12 domestic routes and five international routes compared to the fourth quarter of 2020.
  • Compared to December 2020, United had nonstop service in 12 more domestic and three more international routes in March 2021.
  • Announced plans to fly roughly 52% of its full schedule in May 2021 compared to May 2019.
  • Announced plans to expand the company's global route network with new, nonstop service between Boston Logan International Airport and London Heathrow – the only U.S. carrier to offer nonstop service between the nation's top seven business markets and London Heathrow.
Assisting the Communities We Serve
  • More than 7 million miles donated to charities in need of travel through United's Miles on a Mission program.
  • Over 65,000 lbs. of food and beverages ($322,549 value) donated to Houston Food Bank for winter storm relief.
  • Unique Black History Month campaign raised over $255,000 for The Thurgood Marshall College Fund, The Leadership Conference Education Fund, The NAACP Legal Defense and Educational Fund, and United Negro College Fund.
  • In the first quarter of 2021, through a combination of cargo-only flights and passenger flights, United has transported nearly 290 million pounds of freight, which includes nearly 60 million pounds of vital shipments, such as medical kits, PPE, pharmaceuticals, and medical equipment, and more than 800,000 pounds of military mail and packages.
Additional Noteworthy Accomplishments
  • For the tenth consecutive year received a perfect score of 100% on the Corporate Equality Index (CEI), a premier benchmarking survey and report on corporate policies and practices related to LGBTQ+ workplace equality, administered by the Human Rights Campaign (HRC) Foundation.
  • Teamed up with Chase and Visa in honor of Black History Month to encourage and reward United Credit Cardmembers to make donations to non-profits focused on providing access to educational opportunities for Black students and supporting human and civil rights policies.
__________________________________________________ _______________________

1. Core cash burn is defined as: Net cash from operations, investing and financing activities, adjusted to remove proceeds from the issuance of new debt (excluding expected aircraft financing), government grants associated with the Payroll Support Program of the CARES Act, issuance of new stock, net proceeds from the sale of short-term and other investments, changes in certain restricted cash balances, debt principal payments, timing of certain payments, capital expenditures (net of flight equipment purchase deposit returns), and investments in the recovery and severance payments. Core cash flow is defined in the same manner as core cash burn, except that the result is positive. The company's management views "core cash burn" or "core cash flow" as an important measure in monitoring liquidity in order to assess the company's operational cash needs without the impact of certain extraordinary actions or events, and the company believes this measure provides useful information to investors about the company's core operational performance. See the tables accompanying this release for further information.

2. Excludes operating and non-operating special charges, and unrealized gains and losses on investments. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.

3. Includes cash, cash equivalents, short-term investments, undrawn credit facilities and $7 billion available under the CARES Act loan program.

4. Excludes operating special charges. We are not providing a reconciliation to operating expenses, the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts.

5. Adjusted EBITDA margin is a non-GAAP financial measure calculated as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), excluding special charges and unrealized (gains) losses on investments, divided by total operating revenue. We are not providing a reconciliation to profit margin (net income/total operating revenue), the most directly comparable GAAP measure, because we are unable to predict certain items contained in the GAAP measure without unreasonable efforts.
United to Hold Webcast of First-Quarter 2021 Financial Results
CHICAGO, March 26, 2021 /PRNewswire/ -- United Airlines will hold a conference call to discuss first-quarter 2021 financial results on Tuesday, April 20 at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its first-quarter financial results after market close on Monday, April 19.

The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.
Links
Q1 results (8K) PDF
Q1 call presentation {no powerpoints used audio only, see webcast}
Q1 call transcript link (AlphaStreet)
Q1 call transcript link (SeekingAlpha)
Beware these third-party sources now require a free registration. The transcripts have not be reviewed by UA and have been known to have errors, check against the recorded call
Q1 webcast recording link from UA requires free registration

Q1 Quarterly Report 10-Q - PDF also available as RTF, XLS, HTML, XSD

Past results
UA Q4/Full Year 2020 Results 20 Jan 2021 / Conference Call 21 Jan 2021
UA Announces Q1 2020 Financial Results 30 April / Conference Call 01 May

Last edited by WineCountryUA; Apr 22, 21 at 4:22 pm
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Old Apr 19, 21, 2:44 pm
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Three notable items
Following its return to positive core cash flow1 in the month of March, the company is focused on returning to positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins, even if business and long-haul international demand remain as much as 70% below 2019 levels.
The norm for 2021?

United is already moving to capitalize on emerging pent-up demand for travel to countries where vaccinated travelers are welcome. In fact, the company announced new international flying to Greece, Iceland and Croatia earlier today, subject to government approval.These opportunistic steps help position United to return to positive net income
Leisure is king for 2021

even if business and long-haul international demand only returns to about 35% below 2019 levels.
ouch


UA seems to be positioning itself to somewhere between 35% to 70% business and long-haul "recovery"
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Last edited by WineCountryUA; Apr 19, 21 at 4:34 pm Reason: 2021
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Old Apr 19, 21, 3:06 pm
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Clearly FT members did not participate in the survey nor read the book of grievances.

"Achieved highest customer satisfaction in history in the first quarter".
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Old Apr 19, 21, 4:34 pm
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Originally Posted by WineCountryUA View Post
The norm for 2020?

Leisure is king for 2020
Should these be "2021"?

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Old Apr 19, 21, 4:36 pm
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Originally Posted by DELee View Post
Should these be "2021"?

David
Yes, updated
Usually by April I get the year right but I guess not for 2021

Last edited by WineCountryUA; Apr 19, 21 at 5:40 pm
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Old Apr 19, 21, 4:50 pm
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Originally Posted by HNLbasedFlyer View Post
Clearly FT members did not participate in the survey nor read the book of grievances.

"Achieved highest customer satisfaction in history in the first quarter".
With passenger numbers lower than they have been in years, they could easily say they got less complaints. Customer satisfaction was basically achieved by not dying and not getting COVID.
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Old Apr 19, 21, 5:04 pm
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There is a mention of continued investment in customers with a little passing note on lounges in Denver and Newark but no mention of opening up existing lounges. This customer would be interested in that tidbit
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Old Apr 19, 21, 5:21 pm
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Originally Posted by Jprod View Post
There is a mention of continued investment in customers with a little passing note on lounges in Denver and Newark but no mention of opening up existing lounges. This customer would be interested in that tidbit
With business and long-haul international travel currently at 30% of 2019 levels I'm guessing it will be a while longer before more lounges reopen.

If the 65% of 2019 levels (35% below 2019) estimate is for 2021 full year, I'm guessing we'll see Polaris lounges reopen sometime in the Fall (assuming travel restrictions lift). If it takes longer, that may be more of a winter timing thing.
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Old Apr 20, 21, 12:28 pm
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Although the market is down in general - it appears the analysts didn't like what they heard as UA stock is getting hit particularly hard today.
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Old Apr 20, 21, 1:15 pm
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I heard there was a mention of adding narrowbody PTVs in the call. Did anyone hear it?
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Old Apr 20, 21, 1:34 pm
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Originally Posted by HNLbasedFlyer View Post
Although the market is down in general - it appears the analysts didn't like what they heard as UA stock is getting hit particularly hard today.
The issue is that while United remains bullish in the long term, it is guiding a slight more sluggish recovery in 2021 than the market was hoping for. Today's market performance also bakes in some uncertainty regarding the State Department's (nonsensical) "Do Not Travel" advisory to pretty much the entire world... just as some international bookings are picking up.

Originally Posted by MatthewLAX View Post
I heard there was a mention of adding narrowbody PTVs in the call. Did anyone hear it?
Hart discussed investment in new interiors for narrowbody aircraft as part of his prepared remarks (as well as new/expanded clubs in EWR and DEN) but was very light on the specifics and was not asked to follow up. I would expect to hear more during next week's seminars.

Edit to include Hart's words from the transcript:

I want to start by reiterating Scott's comments on how the United team performed in the first quarter. In the face of continued uncertainty and some severe winter storms, our team never failed to pull together but we couldn't be prouder of their performance. As just outlined in the first quarter, United made further progress on our commitment to return to new. I once again ramping up investments in our customers experience including, modernizing the gate areas in our hubs, reconstructing and expanding United clubs in Newark and Denver, enhancements to the onboard experience like pre-order meal functionality and providing individualized customer feedback to our flight attendants and hard product investments, such as the continuation of our Polaris seat retrofit program and the overhaul of the interior of our narrow body aircraft.
https://seekingalpha.com/article/442...all-transcript

Last edited by EWR764; Apr 20, 21 at 3:42 pm
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Old Apr 20, 21, 4:05 pm
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First post updated with
Q1 results (8K) PDF

Q1 call transcript link (AlphaStreet)
Q1 call transcript link (SeekingAlpha)
Beware these third-party sources now require a free registration. The transcripts have not be reviewed by UA and have been known to have errors, check against the recorded call

Q1 webcast recording link from UA requires free registration
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Old Apr 20, 21, 4:17 pm
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So in their earnings press conference they didn't sound hopeful about the rest of 2021?

https://www.flyertalk.com/articles/u...al-report.html
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Old Apr 20, 21, 4:42 pm
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Originally Posted by exp View Post
So in their earnings press conference they didn't sound hopeful about the rest of 2021?
Not for business travel. And I read the earnings press release and earnings call as while they expect a better 2022 - they are setting expectations for a 2023 rebound.
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Old Apr 20, 21, 4:46 pm
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Originally Posted by exp View Post
So in their earnings press conference they didn't sound hopeful about the rest of 2021?

https://www.flyertalk.com/articles/u...al-report.html
Safe to say, not quite as optimistic as the market was hoping to hear. But United has been pretty circumspect in its messaging throughout the pandemic, so it would be out-of-character to hear something very aggressive from this leadership team.

United is, very roughly, 1/3 domestic leisure, 1/3 domestic business and 1/3 long haul international. When 2/3 of those segments are depressed, and likely to stay that way for a while, it's hard to forecast a rapid bounce-back for United.
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