A United Airlines plane flies in front of the Empire State Building and One Vanderbilt in New York City on December 3, 2021, as it prepares to land at Newark Liberty International Airport in Newark, New Jersey.
Gary Hershorn | Corbis News | Getty Images
united airlines The company reported record quarterly earnings on Wednesday and forecast a strong third quarter as a travel boom continues amid the return of international travel.
Margins fell 1 percentage point after the airline lost some capacity in the second quarter due to flight disruptions at its Newark, New Jersey, hub. United is currently reducing its flight schedule at the airport in August to avoid further cancellations and delays in the event of obstacles such as severe weather.
But United’s quarterly results and forecast still topped analysts’ expectations thanks to strong demand.
Shares of the company rose more than 3% to $56.57 on Thursday, while competitors edged higher or closed lower.
United is the second U.S. airline to report its most recent quarterly results, the same as Delta Airlines“The outlook for tourism demand is positive. American airlines The company reported earnings before the opening bell on Thursday, with the company’s shares down 6% after forecasting third-quarter profit in line with expectations.
United and other airlines have been expanding their international services to take advantage of strong bookings after years of pandemic slump. The airline’s revenue from international flights accounts for about 40% of its total sales, but is growing faster than domestic sales.
What’s this united airlines report The second-quarter results compared with Wall Street expectations, according to average estimates compiled by Refinitiv:
- Adjusted earnings per share: $5.03 vs. $4.03 expected
- Total revenue: $14.18 billion vs. $13.91 billion expected
United reported net income of $1.08 billion, or $3.24 a share, compared with $329 million, or $1 a share, a year earlier. Adjusting for items that include pilot bonuses as part of a new preliminary labor agreement, the company earned $1.67 billion, or $5.03 a share.
A 26% reduction in fuel costs helped boost United’s bottom line.
Meanwhile, revenue per available seat mile fell 0.4% from a year earlier. Total revenue reached US$14.18 billion, a year-on-year increase of 17%.
Compared with the second quarter of 2022, the capacity increase is 17.5%, which is one percentage point lower than United’s planned flight volume before the disruption of the Newark flight.
United CEO Scott Kirby said earlier this month that the airline would have to reduce flights at Newark Liberty International Airport. A series of thunderstorms in early summer derailed United’s operations at the airport, disrupting thousands of flights and displacing passengers and crew.
Kirby said earlier this month that the airline would have to reduce flights there. He has said the problems were caused by near-constant severe weather, airspace restrictions and scheduling issues, and a shortage of air traffic controllers.
United plans to operate about 410 flights a day during the summer, but Andrew Nocella, the airline’s chief commercial officer, said the airline will operate about 390 flights a day next month. The airline typically operates about 435 flights a day, he said.
“So hopefully we’ll get back to a bigger schedule in the future,” he said on Thursday’s quarterly conference call. “But for next summer, I do think we’ll have a smaller schedule and we’ll be running a solid schedule.”
The airline is working with federal and state transportation officials to ensure the reliability of the schedule, he said.
Still, United expects capacity to grow about 16% in the three months ending Sept. 30 from last year, and expects revenue growth of as much as 13% in the same period in 2022. United expects third-quarter adjusted earnings in the range of $3.85 to $4.35 a share, well above analysts’ forecast of $3.70 a share, according to Refinitiv data.
Over the weekend, United and its pilots union said they had reached a preliminary labor agreement that would give pilots pay increases of up to 40% over four years, an agreement that took years to negotiate.
The union estimated the deal was worth $10 billion. The deal still needs to be approved by United’s 16,000 pilots, but could end years of negotiations as United seeks to add to its pilot fleet amid a pilot shortage.