United Airlines has announced some of its plans for 2022 from a capacity standpoint. The network carrier has set its sights on 2022 after coming off a rocky 2021 with two key goals. First, it is gearing up for the return of its Pratt & Whitney Boeing 777s starting this quarter. However, even as those planes come back, United expects to fly less capacity in 2022 than in 2019.
United’s Pratt & Whitney 777s return
United Airlines released details for its plans for 2022. One of the key tenets of United’s big plans for the year includes the return of Pratt & Whitney Boeing 777s. There are currently 52 grounded 777s with Pratt & Whitney engines awaiting their return to service. As part of the airline’s full-year 2021 financial results, United Airlines CEO Scott Kirby announced that those 777s will start to return to service during the first quarter, which ends in March.
These 52 777s have been grounded for nearly a year. In February of 2021, a United Airlines 777 flying out of Denver faced an engine failure that raised concerns from regulators and the airline. While the plane landed safely, images from after the incident showed that what happened on United flight 328 warranted close inspections and a review from regulators. United grounded 52 of its 777s as it awaited a fix.
In October, United Airlines announced that it was eyeing a return to service of the grounded 777s in 2022, at least in time for the busy summer season. Since then, the airline and regulators have made progress on getting inspections and reforms in place to ensure the safety of Pratt and Whitney-powered Boeing 777-200s.
United will still be smaller in 2022
Despite the return of 777s, United also announced that it was taking a cautious approach to 2022. One of its priorities will be matching capacity with demand, and, as a result, it expects to fly fewer available seat miles (ASMs) in 2022 than 2019. ASMs are traditionally a metric in the industry used to measure capacity.
However, this does not mean that United Airlines is planning some robust cuts. Its blockbuster summer 2022 transatlantic schedule, which includes a whopping five new destinations, remains intact. It is still planning on keeping its new links to Africa and a healthy domestic and short-haul international network. However, it will likely not be fully back in some markets where travel restrictions remain, especially in places like China. Recently, United also delayed its San Francisco to Bangalore route.
The 777s will return alongside demand. United stated it would “nimbly ramp up capacity” and unground the 777s as demand returns. This move will also help the airline achieve gauge and utilization targets to support its financial bottom line.
United did not officially release any guidance of how much smaller it expects to be in 2022 compared to 2021. However, in the first quarter, it expects its capacity to be down between 16 and 18% compared to the first quarter of 2019. Given that United manages its capacity based on demand, schedules through the remainder of the year remain flexible. Some cuts may also come as a result of ongoing pilot shortages in the regional sphere that have left around 100 regional jets sitting on the ground as United ramps up its pilot training and tries to secure a pipeline of talent to fly its planes.
As travel demand comes back, it is possible that, towards the end of the year, United could get close to or hit 2019 levels of capacity in a given month or quarter, but overall fly fewer ASMs overall in 2022 when compared to 2019. Much of that planning will depend on the return of international long-haul service into Asia and the South Pacific and the overall demand environment. Leisure travel remains a strong booking stream, though the lucrative business travel sector remains down.
United sees bright spots in 2022
Despite the recent uncertainty caused by the spike in case counts and some scheduling headaches as large numbers of employees are out sick, United only sees this volatility impacting the near term in January and into February. The carrier noted that spring travel and beyond remains strong, reading the airline to remain confident in its long-term plans it outlined under its headline-making United Next plan.
United achieved every major financial guidance target it set in the fourth quarter, setting it up for what it believes will be positive trends in 2022 that will lay the groundwork for reaching its big 2023 and beyond financial targets.
