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Author: Alan LittleDate: 2022-01-21

United Airlines (UAL) -0.1% as Omicron hits near-term recovery

United Airlines (UAL) traded down on Thursday after it posted Q4 beats but said that its recovery will be delayed by the recent outbreak of the Omicron variant.

United Airlines (UAL) said that the Omicron variant will knock its recovery off course in the coming months as its shares traded down 0.1% on Thursday despite its Q4 beats.

In a new earnings report, United Airlines posted a $1.60 per share loss, which was a vast improvement from the $7.00 figure a year ago, and better than the $2.11 Wall Street consensus.

Revenue also trumped forecasts at $8.19bn, but the healthy top and bottom line returns were partly overshadowed by a cautious short-term outlook.

United Airlines said that rising costs linked to fuel and staffing expenses are taking their toll, while flight capacity, which has rebounded this year, is only set to hit a maximum of 84% of pre-pandemic levels in fiscal Q1.

The guidance appears to be indicative of a broader trend in the industry after Delta Air Lines (DAL) recently said that its recovery will be delayed due to the contagious COVID-19 variant.

In a statement, United Airlines CEO Scott Kirby said that the Chicago-based company had been forced to fight and overcome a variety of “unprecedented obstacles” in Q4.

Fortunately, the medium-term outlook is brighter, with Kirby hoping for a respite from the recent setbacks that disrupted its performance.

He concluded: “While Omicron is impacting near term demand, we remain optimistic about the spring and excited about the summer and beyond.”

United Airlines shares were relatively flat in trading on Thursday as a modest 0.1% decline priced them at $44.30.

Meanwhile, American Airlines’ (AAL) report was very similar to its rival, with Q4 beats and comments about the “most challenging” conditions it has faced in commercial aviation, though its shares climbed 0.5% to $17.40.

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