By DAVID KOENIG, AP Airlines Author
United Airlines earned $942 million within the third quarter as vacationers paid higher fares and packed planes over the summer, and the airline offered an upbeat forecast of late-year earnings.
United’s CEO said Tuesday that concern about inflation and the economy doesn’t appear to be discouraging people from buying airline tickets. He said that’s partly because individuals who work a part of the week from home have more flexibility to take short trips.
The Chicago-based airline said adjusted earnings were $2.81 per share, compared with a forecast of $2.28 amongst analysts in a FactSet survey.
United forecast that fourth-quarter earnings shall be between $2 and $2.25 per share, well above a FactSet forecast of 98 cents per share.
Political Cartoons
Third-quarter revenue rose to $12.88 billion, topping analysts’ goal of $12.74 billion.
The airline’s shares rose 7% in prolonged trading after the outcomes and fourth-quarter outlook were released.
U.S. air travel has bounced back from the onset of the pandemic. Nearly 2.5 million travelers went through airport security checkpoints on Sunday, the largest travel day since February 2020, in keeping with Transportation Security Administration figures. Fares are higher than they were before the pandemic, leading to airline revenue exceeding 2019 levels on a per-mile basis.
CEO Scott Kirby said he’s optimistic United will see strong financial leads to the fourth quarter and beyond despite growing concern about an economic slowdown. He credited a change in travel habits, particularly amongst office staff who can now work at home at the very least a part of the week.
“While you were tethered to your desk and needed to be there Monday through Friday, 9 to five, you could not get away for a weekend,” Kirby said during an event at The Washington Post. “Now you’ll be able to leave on Wednesday or Thursday or come back on Monday, Tuesday or Wednesday and work remotely for one or two days.”
In consequence, he said, midweek flights grew notably more crowded in September.
The United report got here every week after Delta Air Lines posted a $695 million third-quarter profit and in addition gave a rosy forecast for the vacations and the fourth quarter.
Delta CEO Ed Bastian said on the time that the airline industry is having fun with a “countercyclical” recovery because consumers still have money, and so they are spending more on services and fewer on goods.
Delta executives said bookings by business customers — a key, lucrative group for airlines — picked up after Labor Day, and so they are confident corporate travel will fully recuperate, even with Zoom calls replacing some in-person meetings.
Businesses cut travel budgets sharply when the pandemic hit. Most have eased some restrictions on worker travel. Still, there’s enough concern about long-term trends — including pressure to cut back flying to limit climate-changing emissions — that the U.S. Travel Association is pushing tax breaks to encourage business-travel spending.
Like business trips, international travel also has lagged the general recovery, but United felt confident enough about 2023 to announce last week that it is going to increase transatlantic flights next summer.
While airlines are seeing a surge in revenue, in addition they face higher costs. The worth of jet fuel is way above pre-pandemic levels, and pilots and other employees are pushing for higher pay within the largely unionized industry.
“Inflationary cost pressures usually are not going away,” Cowen analyst Helane Becker said in a note to clients. “Salaries are going up through hourly pay increases and bonuses, and once that genie is out of the bottle, it’s hard to place it back in.”
Executives of United Airlines Holdings Inc. are scheduled to debate the quarter and their outlook on a call with analysts Wednesday.
American Airlines, which raised its third-quarter revenue forecast last week, is scheduled to issue results Thursday. Southwest will wrap up reports from the large 4 of the U.S. airline industry next week.
Copyright 2022 The Associated Press. All rights reserved. This material is probably not published, broadcast, rewritten or redistributed.
