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Bond Market News

United Airlines Returns to Profit on Travel Surge

United Airlines delivered its first profitable quarter since the pandemic began, posting a net income of $329mn vs a net loss of $434mn in the same period last year. Its operating revenues also increased 6% to $12.1bn vs $11.4bn in Q2 2019, achieving the highest Q2 revenue in the company’s history. The airline expects revenue growth to continue into Q3 because it believes the ongoing pandemic recovery will more than offset economic headwinds in the short to medium term. Therefore, the company expects to be profitable for the full year of 2022. CEO Scott Kirby said, “”It’s nice to return to profitability – but we must confront three risks that could grow over the next 6-18 months. Industry-wide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing. These fundamental challenges have already led to higher costs, higher fuel prices but also higher revenue, which means we’re as confident as ever we will deliver on our 9 percent adjusted pre-tax margin target in 2023.”

United Airlines 5% 2024s have ticked upwards by 0.97 points to a price of 99.5 cents to the dollar, with a yield of 5.25%.

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