Newark airport disruption grounds United Airlines' Q3 forecast
United Airlines trimmed its third-quarter profit forecast on July 17 after continuing operational disruptions at Newark Liberty International Airport dented its performance for a second straight quarter. The airline cited infrastructure issues, air traffic control bottlenecks, and severe weather impacts that disproportionately hit its busiest hub.
According to Reuters, United now expects a 0.9 percentage point decline in Q3 profit margin due to Newark-related complications—after a 1.2-point hit in the second quarter. This has led to adjusted earnings per share forecasts falling below Wall Street expectations.
United operates over 70% of its domestic flights through Newark, making any issues at the airport disproportionately harmful to its operations.
The problems aren't new: earlier in the year, a combination of runway construction, aging ground equipment, and limited radar coverage caused cascading flight delays. According to CNBC, over 30% of United's flights through Newark experienced delays in June and early July, far higher than the national average.
In a call with investors, United CEO Scott Kirby described the situation as 'a perfect storm of systemic issues,' noting that persistent problems at Newark could limit growth despite otherwise strong travel demand.
He emphasized the need for FAA and Port Authority coordination to resolve traffic bottlenecks, calling the current state 'unsustainable for a global hub.' Despite the Newark-specific challenges, United's overall demand outlook remains healthy.
Passenger revenue grew 6.3% year-over-year in Q2, and international routes — particularly across the Atlantic and South Pacific — remain profitable, according to Yahoo Finance. Business travel recovery continues, albeit unevenly across regions.
The airline said it expects full-year capacity to increase by 5%, although operational issues could limit peak-season availability.
The carrier is also facing increased labor costs, including a new union agreement with pilots approved earlier this month, which adds long-term cost pressure.
The Federal Aviation Administration (FAA) has acknowledged the strain at Newark and has floated plans to reduce scheduled flights during peak hours.
However, United argues this approach punishes carriers rather than addressing root problems like outdated air traffic control systems and slow infrastructure modernization.
Newark, operated by the Port Authority of New York and New Jersey, has lagged behind other major airports in upgrades, despite recent renovations to terminals.
United is calling for federal investment in radar and control tower technology to modernize the hub. As The Wall Street Journal reports, airline industry groups have also lobbied for new NextGen satellite-based navigation to reduce congestion.United's stock fell about 3% in premarket trading following the profit warning, and analysts have started adjusting earnings models to reflect persistent Newark underperformance. Bank of America downgraded the stock to 'Neutral', citing 'execution risk tied to Newark throughput and infrastructure reliance.' Still, the airline remains profitable and sees room for margin expansion — if disruptions ease. Its cargo operations also posted a 9% YoY gain, and loyalty revenue from its MileagePlus program continues to grow.
United is working with regulators to explore temporary slot adjustments, rerouting options, and more automation on the ground to manage turnaround times better.
However, until Newark's issues are fixed, the hub's challenges are likely to remain a drag on earnings — even as the broader travel market continues to recover.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
16 hours ago
- Al Jazeera
Trump sets 19% tariff on Philippines in new trade deal
United States President Donald Trump said he has reached a trade deal with the Philippines, charging it 19 percent tariff rate for goods it exports to the US, while US goods will pay zero tariffs. The president announced the new agreement on Tuesday on his social media platform Truth Social shortly after his meeting with President Ferdinand Marcos Jr at the White House. 'We concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States,' Trump said on his Truth Social platform after welcoming Marcos to the White House. The 19 percent tariff rate was just below the 20 percent threatened by Trump earlier this month, but above the 17 percent rate set in April when Trump announced what he called reciprocal tariff rates for dozens of countries. It matches the 19 percent rate announced for Indonesia and bests Vietnam's slightly higher rate of 20 percent. The US had a deficit of nearly $5bn with the Philippines last year on bilateral goods trade of $23.5bn. Marcos, the first Southeast Asian leader to meet Trump in his second term, told reporters at the start of the meeting that the US was his country's 'strongest, closest, most reliable ally'. Trump said the two Pacific allies would also work together militarily but gave no details. Philippine Assistant Foreign Secretary Raquel Solano said last week that trade officials have been working with US counterparts seeking to seal a 'mutually acceptable and mutually beneficial' deal. Protesters gathered near the White House as Marcos arrived, demanding the Philippine leader address the pleas of Filipino Americans and migrant workers who have made multiple requests for support amid US immigration raids. Trump underscored the importance of the US-Philippine military relationship, saying, 'They're a very important nation militarily, and we've had some great drills lately.' Marcos, who arrived in Washington on Sunday, met with Defense Secretary Pete Hegseth and Secretary of State Marco Rubio on Monday. During his trip, he will also meet US business leaders investing in the Philippines. Philippine officials say Marcos planned to stress that Manila must become economically stronger if it is to serve as a truly robust partner to the US in the Asia Pacific region. Looming pressure on China During the Oval Office event, Trump said he may visit China for a landmark trip 'in the not-too-distant future' and noted the Philippines had distanced itself from Beijing after his election last November. 'The country was maybe tilting toward China, but we un-tilted it very, very quickly,' Trump said. The US president has sought to lower tensions with Beijing in recent weeks after pausing a tit-for-tat tariff war that has upended global trade and supply chains. US Treasury Secretary Scott Bessent said on Tuesday he would meet with Chinese officials in Sweden next week. No comment was immediately available from Marcos, who did not speak to reporters before leaving the White House grounds.
Qatar Tribune
3 days ago
- Qatar Tribune
Newark airport disruption grounds United Airlines' Q3 forecast
Agencies United Airlines trimmed its third-quarter profit forecast on July 17 after continuing operational disruptions at Newark Liberty International Airport dented its performance for a second straight quarter. The airline cited infrastructure issues, air traffic control bottlenecks, and severe weather impacts that disproportionately hit its busiest hub. According to Reuters, United now expects a 0.9 percentage point decline in Q3 profit margin due to Newark-related complications—after a 1.2-point hit in the second quarter. This has led to adjusted earnings per share forecasts falling below Wall Street expectations. United operates over 70% of its domestic flights through Newark, making any issues at the airport disproportionately harmful to its operations. The problems aren't new: earlier in the year, a combination of runway construction, aging ground equipment, and limited radar coverage caused cascading flight delays. According to CNBC, over 30% of United's flights through Newark experienced delays in June and early July, far higher than the national average. In a call with investors, United CEO Scott Kirby described the situation as 'a perfect storm of systemic issues,' noting that persistent problems at Newark could limit growth despite otherwise strong travel demand. He emphasized the need for FAA and Port Authority coordination to resolve traffic bottlenecks, calling the current state 'unsustainable for a global hub.' Despite the Newark-specific challenges, United's overall demand outlook remains healthy. Passenger revenue grew 6.3% year-over-year in Q2, and international routes — particularly across the Atlantic and South Pacific — remain profitable, according to Yahoo Finance. Business travel recovery continues, albeit unevenly across regions. The airline said it expects full-year capacity to increase by 5%, although operational issues could limit peak-season availability. The carrier is also facing increased labor costs, including a new union agreement with pilots approved earlier this month, which adds long-term cost pressure. The Federal Aviation Administration (FAA) has acknowledged the strain at Newark and has floated plans to reduce scheduled flights during peak hours. However, United argues this approach punishes carriers rather than addressing root problems like outdated air traffic control systems and slow infrastructure modernization. Newark, operated by the Port Authority of New York and New Jersey, has lagged behind other major airports in upgrades, despite recent renovations to terminals. United is calling for federal investment in radar and control tower technology to modernize the hub. As The Wall Street Journal reports, airline industry groups have also lobbied for new NextGen satellite-based navigation to reduce stock fell about 3% in premarket trading following the profit warning, and analysts have started adjusting earnings models to reflect persistent Newark underperformance. Bank of America downgraded the stock to 'Neutral', citing 'execution risk tied to Newark throughput and infrastructure reliance.' Still, the airline remains profitable and sees room for margin expansion — if disruptions ease. Its cargo operations also posted a 9% YoY gain, and loyalty revenue from its MileagePlus program continues to grow. United is working with regulators to explore temporary slot adjustments, rerouting options, and more automation on the ground to manage turnaround times better. However, until Newark's issues are fixed, the hub's challenges are likely to remain a drag on earnings — even as the broader travel market continues to recover.
Qatar Tribune
6 days ago
- Qatar Tribune
Manchester United make improved bid worth up to $94 million for Mbeumo
PA Media/dpa London Manchester United have made an improved bid worth up to £70 million ($94 million) for Brentford forward Bryan Mbeumo, the PA news agency understands. The 25-year-old has been a key target for Ruben Amorim's Red Devils, who made a first approach of £45 million plus £10 million in potential add-ons six weeks ago. United followed that up with an improved proposal exceeding £60 million a few weeks later but talks stalled as Brentford held on for a greater fee for Mbeumo. The Old Trafford club have now made a new offer that PA understands to be worth £65 million plus an additional £5 million in potential add-ons as they attempt to sign the player before their pre-season tour. Amorim's men head to the United States on Tuesday and have so far only signed Brazil international Matheus Cunha from Wolves for a fee of £62.5 million. Mbeumo joined Brentford from Troyes in 2019 and has a year left on his deal, albeit there is an option to extend by a further year. Tottenham Hotspur, managed by former Bees boss Thomas Frank, have shown interest but the Cameroon international is understood to have expressed a desire to move to Old Trafford. United are looking to rebuild after slumping home 15th last season and losing the Europa League final to Tottenham, meaning they missed out on Champions League qualification and European football entirely. Marcus Rashford, Jadon Sancho, Alejandro Garnacho, Antony and Tyrell Malacia are searching for new homes. Christian Eriksen and Victor Lindelof have left on free transfers, while Jonny Evans has retired.
