United Airlines beat Wall Street estimates for second-quarter earnings and revenue, but the carrier warned that surging jet fuel prices could add nearly $6 billion to its expenses this year, dampening its profit outlook.
For the quarter ended June 30, United reported adjusted earnings per share of $1.99, topping the $1.88 expected by analysts, on revenue of $17.67 billion versus $17.61 billion expected. However, net income fell more than 17% to $805 million, or $2.46 per share, as fuel costs rose 84% year over year to $2.3 billion.
Fuel Costs and Outlook
Jet fuel, the largest expense for airlines after labor, has surged 34% in July alone at major U.S. airports, according to Argus data. United said higher fuel prices could add roughly $6 billion to costs this year compared with its initial expectations. The carrier now forecasts third-quarter adjusted earnings per share between $2.50 and $3.50, below the $3.60 analysts expected, and full-year EPS of $9 to $11, the higher end of its April range.
United said it could further cut capacity plans if fuel costs remain elevated. The airline noted that fuel price volatility since July has already reduced third-quarter earnings by $1.12 per share. It plans to cover up to 90% of higher fuel costs in the current quarter and all of them in the fourth quarter, signaling that travelers will continue to see higher fares.
Demand and Revenue
Despite higher fares, demand remains strong. United grew its flying capacity by 3.5% in the second quarter, and total revenue rose 16% to $17.67 billion. Unit revenue increased 12.1% year over year, the highest since early 2023, driven by gains in premium, corporate, and basic economy tickets, as well as both domestic and international travel.
United executives are scheduled to discuss the results on an earnings call Thursday at 10:30 a.m. ET. Rival Delta Air Lines has also said it is passing on higher fuel costs to passengers, underscoring the broader industry challenge from rising oil prices amid geopolitical tensions.