United Airlines hits revenue milestone, but costs limit quarterly profit

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United Airlines on Wednesday reported revenue of $12.1 billion in the three months to June, its biggest quarterly haul in at least a decade and the most it has ever earned in the second quarter of a year.

High costs dampened the good news, however, keeping profit at $329 million, after a loss of nearly $1.4 billion in the first quarter.

The airline said it expected a slowdown in the economy “in the short to medium term”. And its chief executive, Scott Kirby, said in a statement that the possibility of a recession, high fuel prices and the industry’s difficulties in keeping operations running smoothly posed threats to the industry over the past few months. next six to 18 months. But United nevertheless said it was optimistic, given the strength of the travel recovery.

“These fundamental challenges have already led to higher costs, higher fuel prices,” Kirby said, but “also higher revenues.”

United said it expected operating revenue in the third quarter, which ends in September, to be up about 11% from the same quarter in 2019.

The earnings report, delivered after regular trading closed, sent United shares down more than 6%.

After more than two sluggish years, airlines are experiencing a travel boom. But understaffing, high costs and other challenges have held back the industry, forcing many carriers to rein in their ambitions to limit operational meltdowns.

“While the demand and revenue landscape is the best we’ve seen, the operating environment for the entire industry remains particularly challenging,” Delta chief executive Ed Bastian said when the airline released. its quarterly financial results last week.

Delta posted a profit of $735 million in the second quarter. But this has come with high costs, in part because of the investments made to improve operations.

Airlines were able to recoup some of these costs through higher fares. After dropping somewhat from a peak in May, the average price for a domestic flight was $310 last week, up about 16% from the same period in 2019, according to app Hopper. travel booking and price tracking. The average fare for an international flight was $827, up 26% from 2019.

Like other carriers, United has been scrambling to increase its staff to take advantage of the recovery in demand. Last month, it announced the expansion of a pilot training center in Denver, part of a plan to hire thousands of pilots by 2030.

The airline is scheduled to host a call Thursday with investors, analysts and reporters to discuss its quarterly results and outlook for the third quarter. American Airlines and Alaska Airlines are expected to release their second-quarter results on Thursday.

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