DALLAS: United Airlines Holdings Inc expects a first quarter profit well ahead of Wall Street’s estimates as the carrier capitalises on unusually strong demand for premium and international travel.Adjusted earnings will be 75 US cents to US$1.25 a share this quarter, the airline said in a statement on Tuesday as it reported fourth quarter financial results.
Analysts had expected 56 US cents on average, according to estimates compiled by Bloomberg.
The upbeat outlook highlights how big US carriers anticipate demand above historic norms in what’s typically the industry’s weakest period, after the December holidays and as schools reopen.
United last turned a first quarter profit in 2019, making the forecast a signal that even during the winter months, Americans are continuing to travel across the Atlantic, flights that account for about 20% of United’s revenue, according to Bank of America.
Travel demand is “continuing to accelerate”, United chief executive officer Scott Kirby said in the statement.
This year, the carrier plans 800 daily flights to and from 147 international destinations, up from 700 in 2024.
American carriers are also benefitting handsomely from higher fares after domestic discount airlines slashed unprofitable routes that weighed on ticket prices over the summer.
Rival Delta Air Lines Inc made a similarly bullish first quarter outlook, citing a healthier balance between industry flying plans and travel demand that should continue through the spring.
United’s shares rose 3.7% after the close of regular trading in New York. American Airlines Group Inc, Southwest Airlines Co and Delta also gained.
United climbed 135% last year, compared with a 23% gain for the S&P 500 Index.
Rising sales throughout United’s aircraft cabins helped lift the airline’s fourth quarter adjusted earnings to US$3.26 a share, topping Wall Street’s expectation for US$3.05.
Revenue jumped to US$14.7bil, driven by a 20% gain in basic economy sales and 10% lift from premium fares.
United expects a full-year adjusted profit of US$11.50 to US$13.50 a share, compared to the US$12.84 average of analyst estimates. — Bloomberg
