United Airlines Profit Dips, But Revenue Trends Look Up
CHICAGO – United Airlines reported a 15% decline in third-quarter profit compared to last year, but the airline is seeing positive signs in revenue trends. The company attributed this improvement to low-fare carriers scaling back their growth plans for the remainder of the year.
United’s board of directors also approved a share repurchase program of up to $1.5 billion, marking the first time since 2020 that the airline will be able to buy back its own stock. This was prohibited as a condition of receiving pandemic-relief aid from the federal government.
The airline said that by September, it was seeing a strengthening in corporate, premium, and no-frills basic economy travel.
Airline executives have previously expressed concerns about budget airlines lowering prices on economy-class seats due to an oversupply of flights. However, with carriers like Spirit, Southwest, and others trimming their schedules and reducing the number of seats available, United is seeing an improvement in its pricing power.
A key indicator, revenue per seat, turned positive compared to last year on flights within the United States in August and September, after lagging behind 2023 levels in earlier months.
United’s third-quarter profit came in at $965 million, down from $1.14 billion a year earlier. Excluding special items, the airline reported adjusted earnings of $3.33 per share, exceeding analyst expectations of $3.17 per share, according to FactSet.
Revenue rose by 2.5% to $14.84 billion, exceeding the average forecast by analysts of $14.77 billion.
United’s forecast for fourth-quarter earnings is $2.50 to $3 per share, aligning with the average prediction of $2.76 per share by analysts.
Key Takeaways:
- United Airlines’ third-quarter profit declined by 15% compared to the previous year.
- The airline’s revenue trends are improving as low-fare carriers reduce their growth plans.
- United has approved a $1.5 billion share repurchase program, the first since 2020.
- The airline is seeing a rebound in corporate, premium, and basic economy travel demand.
- United’s fourth-quarter earnings forecast aligns with analyst expectations.
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