United Gets 777 Approval, Updates Guidance

The US Federal Aviation Administration on Monday issued the final paperwork on United Airlines’ Pratt & Whitney-powered Boeing 777s, allowing the aircraft to resume flights, United SVP and CCO Andrew Nocella said Tuesday in Boston during the Bank of America 29th Annual Transportation, Airlines and Industrials Conference.

“We have 52 of [the 777s], which represents about 10 percent of our capacity,” Nocella said. “So, it’s really, really material. They’ve been on the ground for well over a year.”

The airline expects to start flying the aircraft again “probably within the next week, officially in a schedule on May 26,” Nocella said, adding that United then will ramp up to between 30 and 35 aircraft by July. “It is a pretty significant step-up change in our capacity.”

The Boeing 777 aircraft have been grounded since February 2021, when a United flight with Pratt & Whitney’s PW4000 engine suffered an engine failure that scattered debris across several Denver-area neighborhoods.

With the return of the aircraft, United on Monday evening updated its guidance on its total second-quarter revenue per available seat mile, excepting fuel costs, to be up versus 2019 between 23 and 25 percent, compared with the prior guidance of 17 percent.

The company also updated its expected average aircraft fuel price to increase to $4.02 per gallon from $3.43. Capacity projection remained similar at 14 percent below 2019 levels, compared with a previous projection of 13 percent.

Nocella on Tuesday also cited United’s continued strong leisure demand as well as its corporate business segment “continuing to bounce back rapidly here in the United States and across the Atlantic,” he said, with the booking curve “virtually normal,” and volume still a bit down, but “the yields are decent, and domestic and Atlantic are kind of leading the way.”

China remains shut down in several respects, but United is optimism that Japan soon will open up further, according to Nocella, who added that markets in South Korea, Taiwan, Australia, New Zealand and Singapore are “open for business and coming back really strongly.” .”

One concern the carrier had about this summer was that demand was “coming too quickly,” so it made changes to “slow it down” to keep it within the capacity available. “Otherwise, we had a fear that we would be sold out, not only for leisure, but for business this summer,” Nocella said.

While summer will be busy, United sees the “next step up” for business travel, “and maybe even go beyond 2019 levels, particularly for domestic, Latin and Europe, is in the fall, when the kids go back to school, and hopefully Covid-19 is more securely behind us,” Nocella said.

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