Market Overview

United Airlines Sees Friendly Skies Ahead

United Airlines Sees Friendly Skies Ahead

United Airlines (NASDAQ: UAL) reported cargo revenue dipped 4.7% to $282 million year-over-year in the third quarter, but more than made up for it with passenger and ancillary revenue. Operating income soared 24.1% to $1.47 billion and net income grew 22.9% to $1 billion, with operating margin up 2 points to 12.9%

The strong financial performance led the company to raise its full-year earnings guidance to between $11.25 and $12.25. 

For the first nine months of the year, United's cargo revenue was down 4.4% to $863 million. United has fared better than some in the midst of what many consider an airfreight recession this year. Delta Airlines (NYSE: DAL) last week said its third-quarter cargo revenue slumped 37% to $189 million and is down 13% for the year to $567 million due to lower volumes and yield caused in large measure by slower international trade.

However, United's cargo ton miles, an industry benchmark for the distance freight is carried, fell 5.5% to 804,000 for the quarter and is down 3.3% for the year so far to 2.44 million.

The Chicago-based carrier said Oct. 10 that consolidated revenue per available seat mile increased 1.7% over the prior-year period, while cost per seat decreased 0.9%, helped by a 10.7% drop in fuel expense.

United says it expects to hire about 8,000 people by the end of the year.

During the quarter, United began allowing passengers to prepay for checked bags as soon as their tickets were issued rather than waiting until check-in to pay; took delivery of six Airbus A319 single-aisle planes; and announced 12 new and expanded international routes from its gateways, nonstop service to Tokyo starting in March and resumption of service from New York/Newark to Delhi and Mumbai, India.

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Posted-In: air cargo Freight Freightwaves United AirlinesEarnings News General


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