Despite high airfares, the consumer appetite for travel is not showing any signs of slowing down, according to United Airlines.
The shares increased in after-hours trading.
The airline expects the Covid recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment. The fourth-quarter adjusted operating margin is expected to be above the year before.
The carrier posted a third-quarter profit of $942 million, down 8% from three years ago, and $12.88 billion in revenue, which was ahead of analysts' estimates.
Adjusting for one-time items, United earned $2.81 per share, beating analysts' expectations.
According to Refinitiv, the airline expects adjusted earnings per share to be as high as $2.25 for the fourth quarter.
Consumers are willing to spend on trips again because of the strong summer travel season and sunny outlook for the rest of the year, a reversal from early in the Pandemic when Covid-19 restrictions decimated demand. Last week, Delta said it brought in record revenue for the third quarter and forecast a profit for the fourth quarter.
The upbeat outlooks from airline executives contrast with other sectors that have struggled this year, including parts of the retail industry.
Wall Street expected United to perform better in the third quarter than it did.
CNBC reported last month that U.S. airline executives have recently noted strong demand to Europe well past the summer peak and into the fall.
As aircraft deliveries run late due to supply chain problems and other issues, airlines remain constrained in how many flights they can offer, and carriers scramble to hire and train new staff.
Airfares are going up because of limited flights. The revenue per available seat mile was up more than 25%. The metric is expected to be up by as much as it was in the previous year.
The carrier said its fourth-quarter capacity will likely be down about 10% compared with the year before.
There will be a call with analysts on Wednesday. The time is at 10:30 pm
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