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United Lifts 2019 Profit Target As Strong Travel Demand Outweighs MAX Crisis

Published on Oct 21 2019 10:00 AM in General Industry tagged: Trending Posts / United airlines

United Lifts 2019 Profit Target As Strong Travel Demand Outweighs MAX Crisis

United Airlines has topped Wall Street estimates for quarterly profit, boosted by higher fares and lower fuel costs, and lifted its 2019 profit target despite the continued grounding of the Boeing 737 MAX.

Chicago-based United is one of three US airlines that have each had to cancel more than 2,000 monthly flights through the end of the year as Boeing Co's 737 MAX remains grounded following two deadly crashes in Indonesia and Ethiopia.

The flight cancellations have weighed on airline profits and costs, but strong travel demand, despite concerns of a global economic slowdown, continued to offset MAX headwinds and disruption in Hong Kong and China.

As a result, United raised its 2019 adjusted diluted earnings per share guidance to $11.25-$12.25 versus $10.50-$12.00 previously.

Total Operating Revenue

Total operating revenue rose 3.4% to $11.38 billion, underpinned by the airline's three-year strategy to build up flight connections through its main US hubs.

But closely watched unit costs excluding fuel and profit-sharing expenses, a concern for investors, rose 2.1%.

The airline, which is in talks with Boeing over 737 MAX compensation, did not provide any details on the estimated financial impact of the grounding.

Adjusted Net Income

Adjusted net income rose to $1.05 billion, or $4.07 per share, in the third quarter, from $834 million or $3.05 per share a year earlier.

Analysts on average had forecast $3.95 per share, according to IBES data from Refinitiv.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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