US Carriers Report Profits

The two major airlines in the United States, United Continental Holdings Inc. (NYSE:UAL) and U.S Airways Group Inc. (NYSE:LCC) have reported that they have managed to garner quarterly profits in spite of the increasing fuel costs.

In the reports released earlier today, both the rival airline groups said that the companies managed profits as the travel demand remained robust undeterred by the economic slowdown. The earning season of the third quarter has ended in a mostly positive note for these United States based airline companies as they have found the ability to manage capacity. The airline industry is not showing any signs of weakness at present and the outlook is generally positive.

The profits of United Continental Holdings for the third quarter were less than the forecast, which led to a 2 percent drop in the shares to reach $19.94 on the New York Stock Exchange. US Airways’ shares gained by 2.1 percent to reach $5.78 earlier today morning after the company’s profits beat the forecasts.

The airline industry has been on a downturn for almost a decade until now which has sent several carriers into bankruptcy. The carriers have efficiently managed themselves by limiting the number of seats during the rough times which are caused by increasing fuel costs and economic downturn. These strategies have allowed these airlines to sustain themselves and even achieve growth.

A regulatory filing by the United Continental showed that the advance bookings in its airlines for the next six weeks were up by 3.2 percentage points as compared to that of the same period in the previous year on the domestic routes, where as the international routes of the carrier showed a drop of half a percentage point. The similar patterns were presented by Southwest Airlines Co. (NYSE:LUV) and Delta Airlines Inc. (NYSE:DAL) as well during the recent times.

The parent company of the world’s largest carrier, United Airlines, United Continental Holdings Inc. said that the company’s net profit for the third quarter has fallen to $653 million or $ 1.69 per share, compared to the previous year’s $852 million or $2.16 a share. United Continental Holdings Inc. was formed by the merger of UAL Corp. and United Airlines in the last year and reported revenue of $10.2 billion which is 8.7 percent higher than the last year’s figures. The fuel expenses for the third quarter was reported to increased by 41.3 percent excluding the impact of hedges which places the increase at about $1.0 billion year over year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.