United Airlines says it made $1 billion in the second quarter and sees strong remainder of 2023
United Airlines said Wednesday it earned more than $1 billion in the second quarter despite canceling 3,800 flights in the last two weeks of June, when it struggled to recover from storms that crippled its key operation in the New York City area.
United indicated that it sees no let-up in strong demand for tickets: It raised its forecast of third-quarter and full-year profit.
The report underscores how airline revenue and profits are soaring as travel bounces back after the pandemic. Big carriers like United are benefitting especially from the strong recovery in international travel after the lifting of COVID-19-related restrictions.
From April through June, more than 2.4 million travelers per day on average went through U.S. airport security checkpoints, virtually identical with numbers from the same period of 2019 and a 10% jump from last year.
Airlines at times have struggled to handle those crowds, although they have hired enough new workers to replace ones they encouraged to quit during the pandemic. United has been hit the hardest this summer.
In late June, United canceled nearly four times as many flights as any other U.S. carrier, according to data from FlightAware. Many of those cancellations occurred at United’s hub in Newark, New Jersey.
CEO Scott Kirby blamed the Federal Aviation Administration for restricting flights at the airport, then apologized for taking a private flight out of the New York area while thousands of United passengers were stranded.
Since then, Kirby has said the airline must consider reducing its schedule in Newark to limit future disruptions.
The airline is also getting a huge boost from cheaper fuel. United spent $1 billion less on fuel than it did in the same quarter last year, when fuel was its largest single expense.
Now the biggest cost is labor. United’s spending on pay and benefits jumped $874 million, or 31%, to $3.71 billion in the latest quarter. Just last weekend, the airline agreed to a $10 billion deal that, if ratified by pilots, will raise their pay by up to 40% over four years.
United’s second-quarter profit of $1.08 billion compared with $329 million in profit a year earlier. It works out to $5.03 per share, excluding one-time items, on revenue of $14.18 billion. Both figures beat Wall Street expectations. Analysts had forecast earnings of $4.03 per share on revenue of $13.90 billion, according to a FactSet survey.
The peak summer travel season extends well into the July-through-September quarter, and Chicago-based United is predicting third-quarter earnings of $3.85 to $4.35 per share. That would beat analysts’ consensus forecast of $3.76 per share.
Similarly, the airline is raising its full-year forecast to between $11 and $12 per share, , up from a previous $10 to $12 per share and topping analysts’ prediction of $9.78 per share.
United executives declined to discuss the results until Thursday, when they hold a call with analysts and reporters.