Transportation
United Jumps on Optimism Airline Profits Are Set to Improve
- Carriers are reducing excess capacity that hurt profitability
- Prices for leisure flights are ‘rapidly’ climbing, United says
Revenue from business bookings is up as more employees return to working in offices and budget carriers sell more of their new and costlier premium options.
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United Airlines Holdings Inc. shares rose sharply after the company forecast an improved industry outlook now that carriers are cutting excess flights that suppressed profits over the summer.
“There’s an incredible amount of unprofitable capacity in the US marketplace and we’ve seen that exiting at a rapid pace starting in mid-August that continues into next year,” Chief Commercial Officer Andrew Nocella told analysts during the company’s third-quarter earnings call on Wednesday. “The changes we’ve seen so far are only actually the tip of the iceberg.”