By Tracy Rucinski
(Reuters) - United Airlines on Tuesday reported a better-than-expected jump in first-quarter profit as it sold more tickets and cut costs, standing by its 2019 profit target even as its Boeing Co 737 MAX jets remain grounded.
Chicago-based United has removed its 14 MAX aircraft, which were suspended worldwide in March following two fatal crashes, from its flying schedule through early July, eating into U.S. airlines' peak summer travel season.
Still, the airline's parent United Continental Holdings Inc reiterated its estimate for adjusted earnings of $10 to $12 per share in 2019, and said its strategy for scheduling more flights out of its hubs was continuing to win customers.
Adjusted earnings per share rose to $1.15 in the first quarter, ending March 31, from 49 cents a year earlier, overcoming a U.S. government shutdown and severe winter weather earlier this year that curtailed flights.
Wall Street analysts on average had forecast 95 cents per share, according to IBES data from Refinitiv.
Its shares rose 2.8 percent in after-hours trading.
United has largely avoided cancelling MAX flights by servicing those routes with larger aircraft, but President Scott Kirby warned last week that the strategy could not last indefinitely.
The airline, which has been adding seats at a faster pace than rivals, trimmed its 2019 capacity growth target to between 4 percent and 5 percent from 4 percent to 6 percent previously, but did not say whether the decision reflected the effect of the grounded MAX.
Total operating revenue rose 7.1 percent to $8.73 billion in the quarter, while closely watched revenue per available seat mile rose 1.1 percent.
In the second quarter, United said it expects unit revenue to rise between 0.5 percent and 2.5 percent while unit costs, which fell 1.8 percent in the first quarter, were expected to be flat to 1 percent higher.
The No. 3 U.S. carrier is the first of three U.S. 737 MAX operators to report first-quarter results. Southwest Airlines Co and American Airlines Group Inc, which have removed their MAX jets from schedules into August, report on April 25 and April 26 respectively.
A Federal Aviation Administration review board said on Tuesday that it found a Boeing software update for the MAX to be "operationally suitable," suggesting the lengthy regulatory process to get the planes back in the air was underway.
Rival Delta Air Lines Inc, which does not operate the 737 MAX, lifted its 2019 revenue forecast last week after reporting better-than-expected quarterly profit.
(Reporting by Tracy Rucinski in Chicago; Additional reporting by Sanjana Shivdas in Bengaluru; Editing by Bill Rigby)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Apr 17, 2019 04:05:44 IST