United Airlines’ passenger revenue declined 4 percent year
over year to $9.9 billion in the third quarter, but executives said there are signs
that corporate demand is strengthening.
Drags on revenue during the quarter included exchange rates
against a strong U.S. dollar, lower surcharges and travel cuts from the energy
sector, from which revenue was down 14 percent year over year. Close-in
domestic corporate bookings, however, strengthened at the end of the quarter, executive
vice president and chief commercial officer Julia Haywood said during the
carrier’s earnings call. Industrywide domestic capacity growth also has tapered
off, and the “domestic pricing environment is becoming more rational,” United
president Scott Kirby said.
United’s domestic passenger revenue declined 0.9 percent
year over year during the third quarter, compared with a 5.6 percent decline in
international passenger revenue.
Transatlantic revenue took the biggest hit, down 9.7 percent
year over year. United executives cited currency weakness, terrorist events and
Brexit fallout amid “persistent capacity growth.”
Latin America, meanwhile, was the only global region for
which revenue increased year over year, up 0.3 percent. Revenue on routes to
Brazil has started recovering as the country's currency has strengthened
against the U.S. dollar.
Across both mainline and regional services, United’s traffic
increased 1.8 percent year over year as the carrier increased capacity 2
percent. Its load factor declined 0.1 percentage points to 85.5 percent.
United
reported a net income of $965 million for the quarter, compared with $4.8
billion for the third quarter of 2015, though a $3.2 billion income tax
provision benefit skewed third-quarter results last year.