United Airlines (UAL) Q3 FY2021 Earnings Report Preview: What to Look For

Look to UAL load factor

Key Takeaways

  • Analysts estimate adjusted EPS of -$1.69 vs. -$8.16 in Q3 FY 2020.
  • Load factor is expected to rise dramatically YOY, but is still forecast to be slightly below pre-pandemic levels.
  • Revenue is expected to triple amid the resurgence in travel demand.

United Airlines Holdings Inc.'s (UAL) travel volume plummeted last year as the COVID-19 pandemic entered its worst stages, However, the air carrier has seen a strong rebound this year as millions of vaccinations have led to an opening up of the economy. Now, United is betting big that the travel rebound is here to stay. The company in June agreed to spend $30 billion to buy 270 new planes, the largest such purchase industry-wide in a decade.

Investors will look at whether United Airlines' financial performance supports this optimism when the company reports earnings on Oct. 20, 2021 for Q3 FY 2021. Analysts see signs for optimism. They estimate that the company's adjusted loss per share will narrow significantly on both a year-over-year (YOY) and a sequential basis. They also expect revenue to triple YOY.

Investors will also look to United Airlines' load factor, a key metric used by air carriers to gauge what percentage of paid-passenger seating capacity is being filled. Analysts expect United's load factor to improve by nearly two-thirds relative to Q3 FY 2020, although this figure will still be somewhat below pre-pandemic levels.

United's stock has traded erratically but generally ahead of the market for most of the last year. In November 2020, shares surged, reaching peaks in early December 2020 and again in March and June 2021 before losing most of those gains relative to the broader market in the early summer. Since that time, United shares have traded mostly sideways, dipping just below the market in mid-September before mounting a small advance later into early October. As of Oct. 17, 2021 United shares have outperformed the broader market in the past year, providing a 1-year trailing total return of 40.2% as compared with 28.4% for the S&P 500.

One Year Total Return for S&P 500 and United Airlines
Source: TradingView.

United Airlines Earning History

As mentioned above, United's business was significantly disrupted by the start of the COVID-19 pandemic. The company reported adjusted net losses for the first time in at least three years in Q1 FY 2020 and again every quarter since then. Adjusted net losses widened YOY in Q1 FY 2021 and only began to narrow on a YOY basis in Q2 FY 2021. Now, analysts expect that adjusted net losses will continue to narrow sharply YOY in Q3 FY 2021. However, the estimated loss for Q3 highlights that the company has yet to fully recover.

The company's quarterly revenue performance has been similar. Revenue declined YOY for the first time since Q3 FY 2017 in Q1 FY 2020 and again for the four subsequent quarters. Q2 FY 2021 saw a significant reversal of that trend as revenue nearly quadrupled YOY. Analysts estimate that revenue for Q3 FY 2021 will continue its recovery by more than tripling YOY. Still, the revenue rebound forecast by analysts for Q3 would not be enough to bring revenue levels on par with pre-pandemic figures. Revenue for this quarter is expected to be $3.7 billion less than the $11.4 billion in revenue posted in Q3 FY 2019.

United Airlines Key Stats
  Estimate for Q3 FY 2021 Q3 FY 2020 Q3 FY 2019
Adjusted Earnings Per Share ($) -1.69 -8.16 4.08
Revenue ($B) 7.7 2.5 11.4
Load Factor 78.7% 47.8% 86.1%

Source: Visible Alpha

The Key Metric

As mentioned above, investors will also be focused on United Airlines' load factor, a key metric indicating the percentage of a carrier's available seats that are filled with paying passengers. A high load factor, as opposed to a low load factor, indicates that a high percentage of seats are occupied by passengers. Because the costs of sending an aircraft into flight are relatively the same whether there are 50 people aboard or 100, airlines have a strong incentive to fill as many seats as possible by selling more tickets. Higher load factors mean an airline's fixed costs are spread across a greater number of passengers, making the airline more profitable. The pandemic has led to a reduction in air travel, leaving airlines with high fixed costs amid falling load factors and revenues, the combination of which is causing steep losses.

From Q1 FY 2018 through Q4 FY 2019, United maintained a load factor between 80.4% and 86.1%. Load factor fell considerably to 70.9% in Q1 FY 2020 and continued to plunge to a low of 33.1% in Q2 FY 2020. Since that time, load factor has improved each quarter on a sequential basis, climbing as high as 72.0% in Q2 FY 2021. Analysts now expect this trend to continue, with a load factor of 78.7% forecast for Q3 FY 2021. This estimated Q3 load factor approaches the low end of the load factor range that United enjoyed before the pandemic. But that load factor may have to rise even higher for United's revenue to fully recover, and for the air carrier to post a profit again.

Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. AP News. "United Airlines will require US employees to be vaccinated." Accessed Oct. 17, 2021.

  2. Wall Street Journal. "United Airlines Bets on Post-Pandemic Growth With Its Biggest-Ever Jet Order." Accessed Oct. 17, 2021.

  3. United Airlines Holdings Inc. "3Q21 Earnings Call." Accessed Oct. 17, 2021.

  4. Visible Alpha. "Financial Data." Accessed Oct. 17, 2021.

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.