Jet Fuel Costs Slammed These Airlines’ Earnings
Jet- fuel costs strong-armed higher fares during the peak summer travel season as third-quarter profits for United Continental Holdings Inc. (NYSE:UAL) and US Airways Group Inc. (NYSE:LCC) tumbled. United’s earnings slid 14 percent to $773 million, or $2 a share, missing the $2.08 average estimate from analysts, and US Airways posted a 68 percent drop in net income to $76 million, or 41 cents a share.
Costs for jet-fuel climbed 33 percent to $3.37 billion for United and 45 percent to $905 million at US Airways. Results from the two carriers brought the collective third-quarter profit for the seven biggest U.S. airlines to $1.76 billion, while American Airlines parent AMR Corp. (NYSE:AMR) posted a loss. United shares rose 2.3 percent to $20.81, while US Airways rose 5.3 percent to $5.96, however United plans to live frugally changing capacity little next year to limit spending in the slow-growing economy. Demand and pricing remain stable this quarter, according to the President of United.
“United and US Airways executives said travel demand from banking and financial services is weaker than other corporate accounts. Pharmaceuticals, oil and consulting customers are “stable,” United said,” according to Bloomberg.