Analysts are worried about a softening U.S. market but United isn't seeing it yet. Profits in the Atlantic and Pacific regions reached “record highs.”
United Airlines on Tuesday reported “strong and steady domestic demand” and profits for key international markets at “record highs.” But it also broke out the potential business impact of a continuation of the Israel-Hamas war.
Overall revenue in the third quarter rose 12.5%, with domestic revenue up 8.7%. “Domestic revenues in the quarter were second highest all-time and the domestic system remains solidly profitable,” the company said.
The airline’s international passenger revenues were up 23.6% year-over-year.
United, which has suspended flights to Tel Aviv, said a continuation of the war in Israel would reduce its forecast for revenue and earnings.
If flights resume after October, the airline said it expects to earn about $1.80 per share in the fourth quarter. If the war continues and flights are suspended for the rest of the year, earnings could drop to $1.50 per share.
Revenue growth would drop to about 9% if the war continues – down from 10.5% if suspensions last only through October.
Regardless of the length of the war, United is expecting its average aircraft fuel price per gallon to be $3.28 in the fourth quarter, up from $2.95 in the third quarter. United updated its third-quarter guidance in September to reflect a more than 20% rise in fuel prices since mid-July.
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