United Airlines glided through the first part of summer, as strong travel demand pushed average fares higher, but the grounding of Boeing 737 Max jets will become a bigger challenge in the months ahead.
United said Tuesday that its second-quarter profit soared 54%, to $1.05 billion. The results beat expectations, and United slightly raised its forecast of full-year profit.
The Chicago-based airline, however, faces uncertainty because of the grounding of Boeing 737 Max jets after two deadly accidents.
In this Jan. 23, 2019, photo a United Airlines jet is parked at a gate as luggage handlers pull carts near the terminal at Newark Liberty International Airport in Newark, N.J. United Airlines reports financial results on Tuesday, July 16. (AP PhotoJulio Cortez)
United is dipping into the used-plane market to bolster its fleet. The airline said that it recently signed an agreement to buy 19 used Boeing 737-700 jets, which will start showing up in December.
The airline counted on the Max becoming a bigger part of its fleet, growing from 14 planes to 30 by the end of September, and 28 more of them next year. That plan is now in jeopardy, as Boeing has halted Max deliveries with no clear idea yet when the plane will be certified to fly again.
The missing planes will leave a huge gap in United's schedule and cut into the airline's revenue. United has already canceled more than 8,000 flights by taking the Max out of its schedule through Nov. 3, and the number will grow the longer the planes remain grounded.
Without those planes, Boeing is slowing down its expansion plans. The airline had expected to boost passenger-carrying capacity by 4% to 6% this year, but on Tuesday it said it will grow more modestly, between 3% and 4%.
The slower growth in capacity, combined with strong demand, means that airline pricing power "remains quite strong," said Cowen airline analyst Helane Becker.
United's slower growth also reflects the airline's decision earlier this year to suspend flights between New York and New Delhi after Pakistan closed its airspace to civilian flights because of rising tension with India. Pakistan lifted restrictions Monday, and a United spokesman said the airline is considering resuming the flights to India in the coming weeks.
The second-quarter profit was up from $683 million a year earlier.
United said that excluding special gains and charges, it earned $4.21 per share in the quarter. The average estimate among 16 analysts surveyed by Zacks Investment Research was $4.07 per share.
United does not publish average fares, but a stand-in figure — revenue per seat for each mile flown — rose 2.5% over last year's second quarter. That was at the top end of United's guidance to investors and helped propel total revenue 6% to $11.4 billion, slightly higher than analysts expected.
The nation's third-largest airline by revenue raised the lower end of its forecast range for full-year earnings to between $10.50 and $12 per share. It previously forecast $10 to $12 per share.
United executives are scheduled to talk to investors about the results on Wednesday.
Before the financial report, shares of United Airlines Holdings Inc. gained $2.60, or 2.9%, to close at $93.92. They were up less than 1% in extended trading, to $94.25.
PHOENIX (AP) — Fernando Tatis Jr. and Jake Cronenworth hit back-to-back homers, Dylan Cease pitched 6 2/3 strong innings and the San Diego Padres won their third game in a row, beating the Arizona Diamondbacks 7-1 on Friday night.
Manny Machado hit a two-run homer. Cronenworth finished with three extra-base hits, adding two doubles.
The Padres had a big offensive game on the same night they learned they might be adding another good hitter. San Diego is close to acquiring two-time batting champion Luis Arráez in a deal with the Marlins.
“I think it's great — you're always looking for more offense and a left-handed bat to balance out the lineup,” Padres manager Mike Shildt said. “But listen, nothing's official. We'll leave it at that.”
The Diamondbacks have lost 10 straight series openers after beating the Colorado Rockies on opening day.
D-backs pitcher Slade Cecconi (1-2) retired the first nine batters he faced, but ran into trouble in the fourth. Jurickson Profar walked to start the inning and Tatis launched a shot to left-center — his seventh homer of the season.
Cronenworth followed with another homer to make it 3-0 and rookie Jackson Merrill broke an 0-for-20 stretch at the plate with a one-out RBI double for a 4-0 lead.
Cronenworth had a down 2023 season, but has looked much more like the hitter who was an All-Star in 2021 and 2022 through the first month of this season. He's batting .279 with six homers and 25 RBIs.
It was Cronenworth’s second straight game with a homer. He hit a grand slam in the team’s 6-2 victory over the Reds on Wednesday.
“It's the right approach with the right swing,” Shildt said. “He's married both. He's driving the ball to all different parts of the field and not trying to do to much.”
Cecconi didn't make it out of the fifth, giving up six runs over 4 1/3 innings.
The Padres' three-homer outburst provided plenty of support for Cease (4-2), the hard-throwing right-hander who gave up just one run on three hits while striking out eight. He didn't allow a walk.
“I think my fastball command was a lot better, which is really a lot of the battle,” Cease said. “When I'm getting my fastball where it needs to go, it opens up a lot of stuff.”
Machado made it 7-0 in the fifth with a two-run homer to left center off reliever Matt Bowman. The scorched line drive came off Machado's bat at 111.7 mph.
The sliding D-backs — defending National League champions — have lost 10 of their past 15 games and fell to 14-19 for the season.
“We got beat tonight,” D-backs manager Torey Lovullo said. "We got out-managed, we got out-pitched, we got out-hit, we got out-coached. We've got to find a way to get the job done and play our type of baseball. That's the bottom line.
“We're grinding away. We're trying.”
Arizona finished with just three hits. Eugenio Suárez had an RBI single in the fifth.
TRAINER'S ROOM
Diamondbacks: Lovullo told reporters that closer Paul Sewald (oblique) and OF Alex Thomas (hamstring) could return to the active roster as soon as Tuesday against the Reds.
UP NEXT
The D-backs will throw RHP Brandon Pfaadt (1-1, 4.63 ERA) while the Padres will counter with RHP Michael King (2-3, 5.00 ERA) on Saturday night.
AP MLB: https://apnews.com/hub/mlb
Arizona Diamondbacks' Ketel Marte, left, celebrates his double as San Diego Padres shortstop Ha-Seong Kim, front right, of South Korea, and umpire Phil Cuzzi (10) look for the baseball during the first inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
San Diego Padres starting pitcher Dylan Cease throws against the Arizona Diamondbacks during the first inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
San Diego Padres manager Mike Shildt watches the action on the field during the second inning of a baseball game against the Arizona Diamondbacks Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
San Diego Padres' Manny Machado (13) rounds the bases after hitting a two run home run as Arizona Diamondbacks first baseman Christian Walker, left, pauses at first base during the fifth inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
Arizona Diamondbacks relief pitcher Matt Bowman, center, rubs up a new baseball after giving up a two-run home run to San Diego Padres' Manny Machado, left, during the fifth inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
San Diego Padres' Manny Machado points to the sky as he rounds the bases after hitting a two-run home run against the Arizona Diamondbacks during the fifth inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
Arizona Diamondbacks' Ketel Marte, right, slides safely into second base with a double as San Diego Padres shortstop Ha-Seong Kim, of South Korea, applies a late tag during the first inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
San Diego Padres' Fernando Tatis Jr., right, celebrates his two-run home run against the Arizona Diamondbacks with Padres' Manny Machado (13) during the fourth inning of a baseball game Friday, May 3, 2024, in Phoenix. (AP Photo/Ross D. Franklin)
