Skip to content

4 things that stood out on United's earnings call

July 21, 2021
6 min read
United Airlines
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

United Airlines held its second-quarter earnings call on Tuesday, part of a quarterly routine carried out by publicly traded companies. During the call, executives typically describe their company's performance for the previous quarter before answering questions from financial analysts.

As with Delta, which held its call last week, the tone of United's calls have shifted since the pandemic began. Now, with travel rebounding, the airline's leadership sounded almost jubilant while reporting what they expect to be their last quarter without a profit.

Want more airline-specific news? Sign up for TPG's free new biweekly Aviation newsletter!

A few interesting things stood out during United's call. Here are four takeaways.

United is taking a victory lap — and it's informing the airline's positioning going forward

For more than a year now, United executives have started virtually every briefing by bragging about its proactivity through the pandemic, whether reminding investors that it was the first airline to begin drawing down certain schedules in the early days, or the first to implement a new cleaning protocol.

Today, as the airline industry appears set to emerge from the pandemic, executives appeared almost elated.

"No airline has been more willing to candidly acknowledge the risk and challenges posed by COVID-19, and importantly, no airline has been quicker to aggressively confront them," United CEO Scott Kirby said.

"We've worked hard to protect that operational flexibility," Kirby added. "In fact, it's part of why we haven't had the same mass crew cancellation challenges that our competitors have faced as we've ramped [up] our schedule over the last couple of months."

Now, Kirby thinks the airline industry is in full recovery mode.

Sign up for our daily newsletter

"We don't just see the light at the end of the tunnel," Kirby said. "We're exiting the tunnel."

Kirby said that as the recovery continues globally, United is in a good position to take advantage of returning demandparticularly on the international front.

"Our decision, which stands alone among large network carriers, not to retire wide-body aircraft means that we're ready to capture the pent-up demand for long haul international travel."

The Delta variant has not directly affected the airline industry's recovery — yet

The Delta variant is obviously one of the biggest concerns for the travel industry, so Kirby decided to address the elephant in the room by leading off the call with a quick briefing on it.

"We haven't seen any impact at all on bookings, which continue to get stronger week after week," Kirby said. "We think the most likely outcome is that the continued recovery in demand continues unabated."

Kirby cited research showing that the vaccines are all largely effective at preventing severe illness, hospitalization, and death in the case of all known variants. He also pointed to surveys showing that 84% of the airline's MileagePlus members are vaccinated.

More: 6 things we learned about Delta this week during its earnings call

"And so while we expect case counts to rise, given the vaccination rates, they will still remain well below the peak, and hospitalizations and deaths will not rise nearly as much," he said. "That leads to the logical outcome that the reopening continues on track."

"It's possible we have a temporary pullback in the reopening," Kirby conceded. "But given the data [and] science around vaccines, that seems like a lower probability outcome."

United expects to be A bigger airline after the pandemic than it was before

United is planning for a big 2022.

By next year, the airline will be bigger than it was before the crisis, United executives predicted.

“We expect 2022 capacity to be higher than in 2019,” chief financial officer Gerry Laderman said during the call.

Notably, a lot of that capacity will look different than it did in 2019.

"Asia was the first region to be impacted by COVID and continues to be the slowest to recover, with the largest number of border restrictions," United chief commercial officer Andrew Nocella said. "It will likely be 2023, at least until we see a normal schedule to Asia."

That leaves the airline open to deploy its aircraft elsewhere, capitalizing on demand where it exists and where restrictions allow travelers to go.

"Our global network already includes new service to India and Africa to compensate for reduced Asian flying," Nocella added.

Nocella also noted that the airline has already seen robust demand to European countries that have reopened, and expects demand to surge next year as the reopening continues.

"We think the summer of 2022 across the Atlantic has the potential to be our best season ever."

Business travel continues to return — and United expects that to speed up over the coming months.

During Delta's earnings call last week, CEO Ed Bastian told investors that business travel was returning faster than the airline expected it to.

“We are starting to see signs of a resurgence of business and international travel, both of which are supporting the next leg of the revenue recovery,” Bastian said, adding that 95% of Delta's corporate accounts have booked travel in recent months. The airline saw corporate travel recover to 40% of 2019 levels in June.

United has seen the same trend.

"Business travel, which was down over 90% versus 2019 for most of Q2, has inflicted sharply in June and is currently down about 60% versus pre-pandemic levels," Nocella said.

Don't miss: United’s big order reveals two major insights about the airline and the aviation industry as airlines look beyond the pandemic

Nocella added that the airline expects to see two additional inflection points for business travel in future months: first, the end of summer and the return of children to school, and second, the start of the new budget cycle in January.

Overall, United is forecasting that business travel will reach 55-60% of 2019 levels by the end of the third quarter.

Featured image by NurPhoto via Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Top offers from our partners

How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023