United Airlines’ profit up 30% as it recoups fuel costs
CHICAGO >> United Airlines says it is now passing the full impact of higher fuel prices to its customers, helping the nation’s third-biggest carrier boost third-quarter profit by 30 percent.
Parent company United Continental Holdings Inc. said Tuesday that it earned $836 million as rising revenue more than offset a 40 percent jump in fuel spending.
United doesn’t disclose average fares, but an approximation — revenue for every seat flown one mile — rose a surprisingly steep 6.1 percent from a year ago.
CEO Oscar Munoz declared it a “stand-out third quarter performance” that “is proof that United is building momentum.”
The company raised its forecast of full-year earnings per share.
United shares rose more than 4 percent in the first hour of late trading after the report was released.
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Chicago-based United has struggled to keep up with rivals like American and especially Delta. To turn things around, Munoz’s executive team has added flights from its mid-U.S. hub airports in Chicago, Denver and Houston, where many passengers connect to other destinations. Executives say those are now among United’s strongest operations in growth of revenue per seat.
United said it earned $3.06 per share, which included losses of 7 cents per share from tropical storms that led to canceled flights. Analysts, who may not have accounted for the storm-related losses, expected $3.09 per share, according to a survey by Zacks Investment Research.
Revenue jumped $1.1 billion, or 11 percent, to $11 billion, slightly higher than the $10.96 forecast from analysts in the Zacks survey.
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>> Jamie Lui is director of culture and people. Lui has a notable human resources background from organizations such as Monsanto Co. and Pepsi Bottling Group.
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