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United Airlines Stock Slides After Q4 Earnings As Omicron Delays Demand Recovery

United Airlines said Omicron concerns will likely hit near-term demand, but the carrier sees a firmer rebound into the second half of the year.

Updated at 11:10 am EST

United Airlines  (UAL) - Get United Airlines Holdings, Inc. Report shares moved lower Thursday after the carrier posted a narrower-than-expected fourth quarter loss but cautioned that Omicron disruption would delay its near-term recovery.

United's fourth quarter loss was pegged at $1.60 per share, down from $7.00 over the same period last year and firmly inside the Street's $2.11 forecast. Revenues also topped estimates at $8.19 billion.

However, while flight demand is improving, United said capacity is only likely to reach between 82% and 84% of 2019 levels this quarter, with revenues around 77% of those seen prior to the 2020 pandemic. Costs are rising too, United noted, as fuel, staffing and safety expenses continue to escalate.

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United's assessment was similar to that delivered by Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report last week, with the carrier noting the recent Omicron surge would delay a broader recovery in booking demand "from President's Day weekend forward."

"The United team has been fighting through unprecedented obstacles to, once again, overcome the new and daunting challenges that COVID-19 is bringing to aviation," said CEO Scott Kirby. "While Omicron is impacting near term demand, we remain optimistic about the spring and excited about the summer and beyond."

United Airlines was marked 0.1% lower in late morning trading Thursday to change hands at $44.30 each.

American Airlines will published its formal fourth quarter earnings later this morning, after filing a notice with the Securities and Exchange Commission last week that said revenues came in firmer than expected while noting improving profit margins and increased liquidity. 

Pre-tax profit margins, the carrier said, would be between -12% and -13%, again improving from the October estimate of -16% to -18%.

American was marked 0.5% higher at $17.40 each.