Gerald Laderman
Executive Vice President & Chief Financial Officer at United Airlines
Thanks, Andrew, and good morning, everyone. First, I would like to add my thanks to the entire United team for achieving our first quarter of profitability since the start of the pandemic. For the second quarter of 2022, we reported pretax income of $459 million, $611 million on an adjusted basis. Our second quarter CASM-ex ended up 17% versus the second quarter of 2019, which was in line with our prior guidance despite capacity coming in lower than previously expected. But the cost story for the quarter was not about CASM-ex, it was about fuel and the ability of our industry while in the midst of recovering from the pandemic to withstand record high fuel prices.
The fuel price volatility was exacerbated by unusual pressure on jet fuel prices in certain geographic regions where we had limited opportunity to mitigate our exposure. For example, in April and May, the cost of jet fuel based on New York Harbor pricing was off in several dollars higher per gallon than Gulf Coast jet fuel. Nonetheless, our strong unit revenue performance enabled us to offset most of the fuel-pressure as we obtain an adjusted operating margin in the second quarter of just over 8%. While lower than our May guidance of 10%, the difference is mostly due to approximately $150 million of incremental fuel expense for the quarter versus what we forecasted in May.
Turning to our forward outlook. We currently expect CASM-ex to be up approximately 16% to 17% in the third quarter on capacity down 11%, both versus the third quarter of 2019. Our third quarter costs are impacted by the current operating environment. During the recovery period, were supply chain issues, labor shortages, and COVID variants, create challenges throughout the economy. We are mitigating the impact of our operation and our customers by over staffing and limiting capacity. While this creates near term CASM headwind, we believe it is the right thing to do for our customers and ultimately for our profitability.
We also have to manage more closely in cancellations due to various infrastructure issues. For example, for several weeks in September, we are reducing our schedule in Newark by about 200 flights per day as a result of runway construction. These types of cancellations result in additional CASM-ex pressure, as many variable costs simply cannot be avoided due this -- due to the short lead time for the schedule adjustments. Nonetheless, we once again expect to be profitable in the third quarter and expect that our adjusted operating margin to be 10%, based on a fuel price per gallon of $3.81. Additionally, we continue to expect an adjusted pretax profit for the full year 2022.
Looking beyond the third quarter, we will continue to manage our capacity growth into next year prudently. We currently expect our fourth quarter capacity down 10% with our CASM-ex up 14%. In addition, as Andrew described, we now expect full year 2023 capacity to be up no more than approximately 8% versus 2019, down from the original United Next goal of 20%. Even if it's lower capacity for next year, we feel good about achieving our United Next adjusted pretax margin target.
After taking into account the impact of lower capacity causing, for example, fixed cost to be spread among fewer ASMs and about three points of inflationary pressure we've seen, we would expect CASM-ex to be up about 5% versus 2019, using a fuel price per gallon of $3.40 based on the current forward curve, unit revenue can decline by as much as 8 point from current levels and we would still achieve the 9% United Next adjusted pretax margin target. And as Scott mentioned, as our assumptions change, we would do what it takes to deliver on our commitment.
Turning to fleet, our new aircraft delivery scheduled for this year continues to shift a little to the right. We now expect to take delivery of no more than 46 MAX aircraft and five 787s during the year. We currently expect full-year 2022 adjusted capex of about $5.2 billion, which we lower, to the extent, fewer aircraft are actually delivered. We finally started taking delivery of our first new aircraft of the year during the last week in June. And in the last few weeks, we have taken delivery of four 737 MAX aircraft. We continue to evaluate the most appropriate way to pay for our new aircraft deliveries in the context of our liquidity position, other potential uses of our cash in the current macro environment.
Given that we ended the second quarter was about [Phonetic] $22 billion of liquidity, we used cash-on-hand to purchase the four aircraft already delivered this year. And currently we expect to pay for more than half of our total 2022 aircraft deliveries with cash-on-hand, though we remain flexible as we continue to monitor the economy in the recovery. Paying for these aircraft with cash while paying down current maturities and opportunistically prepaying certain debt [Technical Issue] to build our unencumbered asset base, a win-win for the balance sheet.
So far this year we have reduced our total debt by over $1 billion and with scheduled debt payments between 3 and 4 billion dollars annually for the next several years, we will continue to have the ability to delever our balance sheet through normal amortization. In conclusion, as we execute our network, cost and balance sheet plans, which form the core of our United Next Strategy, we grow more confident every day that we will deliver on our 2023 and 2026 adjusted pretax margin target. And with that, I will hand it over to Kristina to start the Q&A.