United Airlines parent UAL Corp. said Wednesday it expects a key measure of passenger revenue to rise by as much as 8.5 percent in the third quarter as it benefits from both packed planes and higher fares than a year ago.
In a filing with the Securities and Exchange Commission, the company said passenger revenue per available seat mile, or the amount the airline makes for each seat flown, is forecast to increase 7.5 to 8.5 percent year-over-year for mainline operations. It is expected to climb 6.75 to 7.75 percent overall.
Chairman and CEO Glenn Tilton said the nation's No. 2 carrier is continuing the momentum from a solid second quarter.
Cost per available seats flown, excluding fuel and other items, is expected to rise 5.25 to 5.75 percent overall. The figures include $31 million in additional expenses from profit-sharing programs and a non-cash charge for surplus and obsolete maintenance inventory not included in an earlier forecast.
United's load factors — measuring how full planes were compared with their seating capacity — reached a record 89.1 percent for June, 87.3 percent for July and 86.3 percent for August as U.S. airlines benefited from a busy summer travel season.
Mainline traffic, or that from flights not counting its regional United Express operations, is expected to be flat or fall by as much as 1 percent compared with the same quarter last year. Including the regional flights, traffic is forecast to be half a percentage point above or below the year-earlier quarter.
Mainline capacity is expected to fall 1.5 percent, with consolidated capacity dropping 1.2 percent.
In a note to employees, Tilton said United's passenger unit revenue performance for the quarter is expected to be among the best in the industry.
"The third-quarter financial guidance we issued today is further proof of the positive momentum of the company," he said.
UAL shares rose $1.67, or 3.6 percent, to $47.79 in Wednesday trading.