United Airlines made a profit for the first time in its history on Wednesday, but said it will scale back its growth plans over the next four years.
United made its first quarterly profit since the Covid-19 epidemic began without federal payroll aid.
Thanks to strong travel demand, even at sky-high fares, unit revenues in the second quarter surged 24% over the previous year, while unit costs, including fuel, rose 17%. The cost of fuel went up as well.
United CEO Scott Kirby said in an earnings release that they need to confront three risks that could grow over the next 18 months. There are a number of operational challenges that limit the system's capacity, record fuel prices and the possibility of a global recession that we are already addressing.
The Chicago-based airline estimated its third-quarter capacity would be 85% of the same quarter of 2019. and fourth-quarter capacity would be 90% restored compared with three years ago.
Rival airlines have trimmed their schedules recently.
The company said it will expand flying no more than 8% over the next year.
After the results were reported, the shares fell.
Wall Street expected United to perform better in the second quarter than it did.
Last week, Delta reported a jump in second-quarter sales and forecast continued travel demand through the end of the summer season. Before the market opens on Thursday, American Airlines will report its second-quarter results.
Costs, including a jump in fuel prices, continue to weigh on airlines as they try to dig their way out of the swine flu.
Unit costs are expected to be higher in the third quarter and fourth quarter than they were three years ago.
Analysts and media will be able to listen to the earnings call. The time is on Thursday.
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