United Airlines Hits a Revenue Milestone, but Costs Constrain Its Quarterly Profit
Wednesday United Airlines Reported revenue of $ 12.1 billion In the three months ending in June, it is the largest quarterly shipment in at least 10 years and the largest shipment ever obtained in the second quarter of the year.
However, after losing nearly $ 1.4 billion in the first quarter, high costs brought dampers to the good news, but profits were only $ 329 million.
The airline said it expects the economy to slow “in the medium term.” In a statement, CEO Scott Kirby said the potential recession, rising fuel prices and the struggle to keep the industry running smoothly threaten the industry over the next six to eighteen months. Said that it brought. But United said it was still optimistic given the strength of the travel recovery.
“These fundamental challenges have already led to higher costs and higher fuel prices,” Kirby said, but “revenues have also increased.”
United said operating revenue for the third quarter ending in September is expected to increase by about 11% from the same quarter in 2019.
Revenue reports delivered after regular closings have caused United’s stock to fall by more than 6%.
After more than two years of slump, airlines are enjoying the travel boom. However, staff shortages, high costs, and other challenges are hampering the industry, forcing many carriers to curb their ambitions to limit operational meltdowns.
Delta’s CEO Ed Bastian said in a quarterly earnings report last week, “Demand and revenue are at their best ever, but the industry-wide operating environment still faces its own challenges. I will. “
Delta reported a profit of $ 735 million in the second quarter. However, it was coupled with high costs, partly due to the investments made to improve operations.
The airline was able to recover some of these costs at a higher fare. After a slight drop from its May peak, average domestic prices were $ 310 last week, up about 16% from the same period in 2019, according to Hopper, a travel booking and price tracking app. The average international fare was $ 827, up 26% from 2019.
Like other carriers, United has been competing to increase staff to take advantage of the recovery in demand. Last month, it announced the expansion of its pilot training center in Denver as part of a plan to hire thousands of pilots by 2030.
The airline will call investors, analysts and reporters on Thursday to discuss quarterly earnings and third quarter outlook. American Airlines and Alaska Airlines will report Q2 results on Thursday.
