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United Continental Holdings Inc. said a benchmark measure of pricing power rose near the upper end of a company forecast even as the No. 3 U.S. carrier ramped up the supply of seats and flights.
Passenger revenue for each seat flown a mile, a proxy for an airline’s ability to raise fares, rose about 2.7 percent in the quarter ended March 31, United said in a regulatory filing Monday. The Chicago-based carrier last month projected an increase of 1 percent to 3 percent.
The report suggested that United’s fares were holding up despite the airline’s fast growth. Investors panned an aggressive expansion plan the company unveiled Jan. 24, sending the shares down 11 percent amid fears that the rising seat supply would dent pricing and profits across the industry. United boosted seating capacity 3.6 percent in the first quarter and has said it expects to increase capacity by as much as 6 percent each year for the next three years.
United rose 1 percent to $69.20 in late trading in New York. The shares advanced 1.7 percent this year through the close on Monday, the only increase on a Standard & Poor’s index of major U.S. carriers.
Delta Air Lines Inc. last week said that passenger revenue for each seat flown a mile grew 5 percent in the first quarter, also at the top end of its projection. That sparked a 3.4 percent rally in the S&P airline index.
©2018 Bloomberg L.P.