Latest news with #ScottKirby
Qatar Tribune
12 hours ago
- Business
- 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 However, United argues this approach punishes carriers rather than addressing root problems like outdated air traffic control systems and slow infrastructure modernization.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.
Yahoo
2 days ago
- Business
- Yahoo
United Airlines Tops Q2 Earnings Estimates on Low Fuel Cost
United Airlines Holdings, Inc. (UAL) reported mixed second-quarter 2025 results wherein the company's earnings beat the Zacks Consensus Estimate, but revenues missed the same. UAL's second-quarter 2025 adjusted earnings per share (EPS) (excluding 90 cents from non-recurring items) of $3.87 surpassed the Zacks Consensus Estimate by a penny but declined 6.5% on a year-over-year basis. The reported figure lies within the guided range of $3.25-$4.25. Operating revenues of $15.2 billion fell short of the Zacks Consensus Estimate of $15.4 billion but increased 1.7% year over year. Passenger revenues (which accounted for 90.8% of the top line) increased 1.1% year over year to $13.8 billion. UAL flights transported 46,186 passengers in the second quarter, up 4.1% year over year. Cargo revenues grew 3.8% year over year to $430 million. Revenues from other sources rose 8.8% year over year to $970 million. UAL's diverse revenue sources contributed to its second-quarter results. These include premium cabin revenues, which went up 5.6% year over year, revenue from Basic Economy (up 1.7% year over year), cargo revenues (up 3.8%) and loyalty revenues (up 8.7%). United Airlines Holdings Inc Price, Consensus and EPS Surprise United Airlines Holdings Inc price-consensus-eps-surprise-chart | United Airlines Holdings Inc Quote UAL's chief executive officer, Scott Kirby, stated, "Our second-quarter performance was more proof that the United Next strategy is working. I am extremely proud of the team for executing a strong operation and navigating through a volatile macroeconomic period, while still growing earnings and pre-tax margin for the first half of the year. Importantly, United saw a positive shift in demand beginning in early July, and, like 2024, anticipates another inflection in industry supply in mid-August. The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year." Other Details of UAL's Q2 Earnings Report Below, we present all comparisons (in % terms) with the second quarter of 2024 figures unless otherwise stated. Airline traffic, measured in revenue passenger miles, grew 4.5%. Capacity, measured in available seat miles, expanded 5.9%. Although traffic improved year over year, it failed to outpace capacity expansion. As a result, the consolidated load factor (percentage of seats filled by passengers) declined 1.1 points on a year-over-year basis to 83.1%. We had expected the consolidated load factor to be 79.5%. Consolidated passenger revenue per available seat mile (a key measure of unit revenues) inched down 4.5% year over year. Total revenue per available seat mile decreased 4% year over year. The average yield per revenue passenger mile fell 3.2% year over year to 19.74 cents. The average aircraft fuel price per gallon fell 15.3% year over year to $2.34. Fuel gallons consumed were up 4.7% year over year. Operating expenses (on a reported basis) increased 6.5% year over year to $13.9 billion. Consolidated unit cost or cost per available seat mile, excluding fuel, third-party business expenses, profit-sharing and special charges, inched up 2.2% year over year to 12.36 cents. UAL exited the second quarter with cash and cash equivalents of $9.35 billion compared with $9.37 billion at the prior-quarter end. Long-term debt, finance leases and other financial liabilities were $20.8 billion compared with $24.4 billion at the first-quarter end. UAL repurchased $0.2 billion of shares in the second quarter of 2025. UAL generated $1.13 billion of free cash flow in the June quarter. UAL's Outlook UAL anticipates less geopolitical and macroeconomic uncertainty in the second half of 2025, with demand inflection beginning in early July with a 6-point acceleration in booking demand. For third-quarter 2025, UAL anticipates adjusted EPS between $2.25 and $2.75. The Zacks Consensus Estimate of $2.70 lies within the guidance. For 2025, UAL now expects adjusted EPS between $9.00 and $11.00. The Zacks Consensus of $10.07 lies within the updated guidance. The updated 2025 EPS guidance comes in contrast with UAL's prior 2025 dual EPS guidance unveiled during first-quarter 2025 (for a stabilized environment, 2025 adjusted EPS is expected to be between $11.50 and $13.50; for a recessionary environment, 2025 adjusted EPS is expected to be between $7 and $9). UAL expects adjusted capital expenditures to be less than $6.5 billion. UAL's Zacks Rank Currently, UAL carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Q2 Performances of Other Transportation Companies Delta Air Lines (DAL) reported second-quarter 2025 earnings (excluding $1.17 per share from non-recurring items) of $2.10 per share, which beat the Zacks Consensus Estimate of $2.04. Earnings decreased 11% on a year-over-year basis due to high labor costs. Revenues in the June-end quarter were $16.65 billion, beating the Zacks Consensus Estimate of $16.2 billion and decreasing marginally on a year-over-year basis. Adjusted operating revenues (excluding third-party refinery sales) increased 1% year over year to $15.5 billion. J.B. Hunt Transport Services, Inc. (JBHT) reported second-quarter 2025 earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.34 and declined 0.8% year over year. Total operating revenues of $2.93 billion missed the Zacks Consensus Estimate of $2.94 billion and were flat year over year. JBHT's second-quarter revenue performance witnessed a 6% increase in Intermodal (JBI) loads, a 13% increase in Truckload (JBT) loads, a 3% increase in Dedicated Contract Services (DCS) productivity and a 6% increase in Integrated Capacity Solutions (ICS) revenue per load. These items were offset by Final Mile Services revenue declining 10%, lower revenue per load in both JBI and JBT, a 9% decrease in ICS load volume and a 3% decline in average trucks in DCS. Total operating revenues, excluding fuel surcharge revenue, increased 1% on a year-over-year basis. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report United Airlines Holdings Inc (UAL) : Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
3 days ago
- Business
- Yahoo
United Airlines says less uncertainty opens door to 'strong finish' to 2025
United Airlines was bullish on Wednesday about a "strong finish" to the year as the carrier saw demand begin to rise earlier in the month amid decreased uncertainty. The Chicago-based airline said in its second-quarter earnings report that demand posted a "sequential 6-point" acceleration beginning in early July, with business demand notching a "double-digit acceleration" compared to the second quarter. That uptick, United said, came from "less geopolitical and macroeconomic uncertainty." "Importantly, United saw a positive shift in demand beginning in early July, and, like 2024, anticipates another inflection in industry supply in mid-August," CEO Scott Kirby said in a statement. "The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year." Airlines Are In 'Arms Race' To Unveil Upgraded Luxury Suites Earlier in the year, United and other major U.S. carriers had been contending with softer demand and concerns about how uncertainty related to the economy, trade and other factors could impact consumers. Read On The Fox Business App Kirby said Wednesday that he was "extremely proud of the team for executing a strong operation and navigating through a volatile macroeconomic period, while still growing earnings and pre-tax margin for the first half of the year." United brought in a total of $28.4 billion in operating revenue over the first six months of the year, up from the $27.5 billion it saw during the same period the prior year. Meanwhile, its net income and diluted earnings per share for the first half the year both posted jumps, hitting $1.36 billion and $4.12, respectively. In the second quarter specifically, the carrier said it generated $15.24 billion in total operating revenue, a roughly 1.7% increase year-over-year, and saw net income of $973 million, a 26.4% decrease year-over-year. United also issued an update to its guidance for 2025, saying it now anticipates adjusted diluted earnings per share in the $9.00-11.00 range for the year. For the third quarter, it foresees $2.25-2.75, with recent issues at Newark Liberty International Airport expected to negatively impact its adjusted pre-tax margin by about 0.9 points. Faa Slashes Newark Airport Flights Amid Mounting Delays, Disruptions The airline has carried over 86.99 million passengers over the first two quarters of the year, including 46.2 million in the second quarter. It has seven hub airports in the U.S., including Chicago O'Hare, Denver, Houston Intercontinental, Los Angeles, Newark Liberty, San Francisco and Washington Dulles. The company's market capitalization hovered around $30.46 billion as of Thursday morning, the day after it released its second-quarter article source: United Airlines says less uncertainty opens door to 'strong finish' to 2025
CNBC
3 days ago
- Business
- CNBC
Why Delta and United are pulling away from the airline pack
For United Airlines CEO Scott Kirby, there's his airline, his carrier's main rival, Delta Air Lines, and then everyone else. Delta and United accounted for more than 86% of the profits posted by the seven largest airlines last year. Airline margins are notoriously thin, less than 4% last year, compared with close to 20% for big U.S. companies, according to the Airlines for America industry group. Already, the top four U.S. carriers — Delta, United, American and Southwest — accounted for about three-quarters of domestic capacity. But beyond size, Delta and United's networks and focus on premium travel will help them weather a challenging year better than their competitors, analysts say. "One thing that's becoming even more clear … is the strength of the two brand loyal airlines really winning and everyone else losing," Kirby said on the carrier's quarterly call on Thursday. "It's hard to say that he's wrong," said Melius Research airline analyst Conor Cunningham. And things are looking up for the rest of the year, Delta and United's CEOs have said. Kirby told CNBC's "Squawk Box" on Thursday that United's pared-down 2025 forecast has some upside because of a pop in demand this quarter after on-again-off-again tariffs and other challenges bogged down bookings earlier this year. An air traffic controller shortage that sparked flight cuts at United's major hub of Newark Liberty International Airport in New Jersey is taking a bite out the airline's second and third quarter profits. Airfare is falling this year, even in what are traditionally peak travel months, with too many coach class seats in the market. Domestic travel demand, especially from price-sensitive consumers, has been weaker than the lofty expectations airline executives had at the start of 2025. Airfare fell 3.5% in June from a year earlier while inflation overall rose, according to the Bureau of Labor Statistics. "The summer is generally never on sale, and the summer is heavily on sale right now," Southwest CEO Bob Jordan told CNBC in late June. Delta and other carriers have said they will scale back their capacity plans after the summer travel season, which wanes around mid-August, but even making money during peak periods is challenging this year. "Simply put, a portion of the industry is drowning; incapable of producing profit, even during the summer peak," JPMorgan Chase airline analyst Jamie Baker wrote in a note on Thursday. "It strikes us as patently logical to expect these franchises to throw as much capacity at peak demand as they can muster, in hopes of potentially breaking above the waterline for just a brief gasp of air." Both Delta and United have trimmed their 2025 outlooks. (Southwest, American and Alaska report quarterly results next week.) But an emphasis on international travel, as well as premium seats and loyalty programs, is boosting both carriers. United on Wednesday reported a 7% drop in the second quarter in domestic revenue per available seat mile, a gauge of airline pricing power. The carrier also said it saw a 4.5% drop in that figure overall, though international unit revenues weren't down as much, thanks in part to a boost from trans-Pacific flights like those to tourists' latest obsession: Japan. Delta's domestic revenue was down 5%, and down 3% overall. Even some trans-Atlantic trips showed signs of oversupply in the market as feverous demand for European trips post-pandemic settles down and inbound tourism to the U.S. drops. "It can't be amazing forever. What goes up comes down," said Melius' Cunningham. "This is the airline industry." But both United and Delta pointed to strength in their premium cabins, where seats are are several times more expensive than a coach fare, as well as in their loyalty programs. Delta said its revenue from its lucrative American Express partnership rose 10% from last year in the second quarter to $2 billion, and premium-class revenue was up 5%. All airlines are thinking of new ways to generate revenue, not just remove costs from the system through culling unprofitable flights and other drains. Southwest, for example, in May introduced checked bag fees for many customers, a once unthinkable add-on for a carrier that helped democratize air travel. It plans to start selling assigned seats, get rid of its long-time open seating plan and offer extra-legroom options that command a premium. The carrier is the only major U.S. airline whose stock is up this year. At the higher end, Delta said it's testing segmentation that it's mastered in the back of the plane up in the front of the cabin. "Premium has certainly been where our margins have continued to expand, and so we're highly focused on continuing to provide improved service to those customers and more segmentation," Delta's president, Glen Hauenstein, said on a July 10 earnings call. "The segmentation that we've done in main cabin is kind of the template that we're going to bring to all of our premium cabins over time because different people have different needs." United recently unveiled a revamped Polaris class, its top-tier cabin for longer-haul flights, as well as new dedicated lounges. United's chief commercial officer, Andrew Nocella, said the company has room to expand premium-economy, the cabin that sits between business-class and coach. "That's the cabin … that's generating very good returns and the one that we'll probably lean more into going forward," he said. Nocella hinted at segmentation at the front of the plane, but stopped short of sharing details. "Not everybody wants the full experience. Some people want other experiences," he said. "We look forward to continuing to diversify our revenue base and segment it in the appropriate way, and I'll leave it at that." While Kirby puts his airline and Delta in a similar bucket, rivalry between them is strong. When asked about Delta launching routes from Los Angeles and United's home hub in Chicago O'Hare International Airport to Hong Kong, an existing United route, Kirby brushed it off. "We fly 6,000 flights a day so a couple of new routes aren't that big of an issue for us," he said. "But I guess I feel complimented when other airlines feel like they're worried about us getting ahead have and have to fly routes that are going to lose money for them."
Forbes
3 days ago
- Business
- Forbes
United CEO Chides Delta As Both Airlines Look To The Pacific
Delta, United and American all battle at LAX. Here a Delta Airbus A319 from Tampa taxis at the ... More airport in March. (Photo by Kevin Carter) Topline Wednesday, Delta announced it will expand at Los Angeles International Airport, adding daily flights to Hong Kong on June 6, 2026 and three daily flights to Chicago O'Hare starting June 7, 2026. On the United earnings call on Thursday, a reporter asked United CEO Scott Kirby about the new routes. Kirby responded: 'We fly 6,000 flights a day. So a couple of new routes aren't that big of an issue for us. But I guess I feel complemented when other airlines feel like they're worried about us getting ahead and have to fly routes that are going to lose money for them.' Delta and United, the two most successful U.S. airlines, have broken from the pack due to well-located hubs, strong international routes and appeals to premium passengers willing to pay more for seats. On earnings reports in the past two weeks, both showed their strongest growth in the Pacific, where both are growing. Delta reported that Pacific revenue grew 11%, transatlantic revenue grew 2%, total international revenue grew 2% and domestic revenue declined 1%. United reported that Pacific revenue grew 8.7%, while Atlantic revenue grew 2.5%, total international revenue grew 3.8% and domestic fell by 0.7%. United also said that Pacific passenger revenue per available seat mile grew 2.9%, while Atlantic PRASM fell 2.3%, total international PRASM was down 1% and domestic PRASM fell 7%. 'While Delta and United did not share commentary on the Pacific markets on their second quarter calls, they grew capacity 4% and 5.7% respectively year over year during the quarter which indicates it is a growth area,' Meredith Dixon, Senior Analyst at Octus, told me in an email. 'Both meaningfully grew capacity in 2024, as Delta's Pacific capacity rose 32% year over year in 2024 while United increased Pacific capacity by 31%,' Dixon said. 'Currency has an impact, as the weakness of the Japanese yen has spurred higher travel demand to Japan from the United States,' she said. 'Partnerships have also helped expand transpacific revenues, as Delta's JV with Korean Air has boosted revenues in South Korea, while United's All Nippon Airways (ANA) arrangement has bolstered its Pacific performance. 'The resiliency of premium offerings could also play a role in why unit revenues in particular have outperformed, as travelers are increasingly willing to pay for an elevated experience, and the longer Pacific flights may enhance that preference,' Dixon said. Delta is already the leading carrier at LAX. Next year it will add not only flights to Hong Kong, but also Chicago, a hub for both American and Delta, who both serve the route already. 'As the largest global carrier at LAX, we're continuing to invest in routes that matter to our customers and deliver the premium travel experience that they've come to expect from Delta,' said Paul Baldoni, senior vice president of network planning, in a press release. From January through May 2025, Delta had a 19.48 % market share at LAX, while United had 15.49 and American had 15.21, according to airport statistics. Southwest had 8% and Alaska had 7%. Delta will add Los Angeles to Shanghai and Melbourne in December. United, already the leading trans-Pacific carrier, said in April that it will boot service. In October, United will become the only U.S. airline to fly to Bangkok and Ho Chi Minh City. Both will be served from Hong Kong, where it will offer connections from Los Angeles and San Francisco. In December, the carrier will add service from San Francisco – the best Pacific hub in the U.S. – to both Adelaide Australia (three a week) and Manila ( a second daily flight). With these new routes, United will now offer flights from the U.S. to 32 different cities in the Pacific region – four times that of any other U.S. carrier, United said.
