by Lacey Pfalz
Last updated: 8:50 AM ET, Thu July 18, 2024
United Airlines is following many American airlines by predicting third quarter profits to be below previous projections as it also celebrates flying the most passengers in a second quarter this year.
While travelers are flying more than ever this summer, airlines in America have prepared in excess, causing many to drop airfares. Delta, for example, reported it would expect a $100 million loss simply for excess capacity prepared for the Paris Olympics and Paralympics this year, which hasn’t seen the popularity of other global sporting events.
United Airlines predicts an adjusted profit range of $2.75 to $3.25 per share in the third quarter, which ends at the end of September. Previously, the profit share was predicted at $3.44.
United will also be cutting seat capacity by 3 percent for domestic flights, which it hopes will help pricing. According to Reuters, major airlines have scheduled 6 percent more domestic seats in July than last year. Airfare prices fell 5.6 percent in June.
"The revenue diversity advantages that we've built with our premium customers, Basic Economy customers, and domestic road warriors, on top of the world's best loyalty program and leading customer service, have propelled our margins to near the top of the industry," said United Airlines CEO Scott Kirby in the second quarter earnings statement.
"Looking forward, we see multiple airlines have begun to cancel loss-making capacity, and we expect leading unit revenue performance among our largest peers in the second half of the third quarter. United has long been preparing for the moment when industry wide domestic capacity would adjust - it's now clear that inflection point is just 30 days away,” continued Kirby.
While the predictions expect less profits in the third quarter, United still has plenty to celebrate from the second quarter. It broke a passenger volume record, flying the most passengers in a second quarter in company history, with 44.4 million travelers. It also set a daily record, flying 565,000 travelers in a single day.
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