Try unlimited access
Try full digital access and see why over 1 million readers subscribe to the FT
$1 for 4 weeks
Explore our subscriptions
Find the plan that suits you best.
Premium access for businesses and educational institutions.
Today, United Airlines has announced a second quarter pre-tax loss of $2.1 Billion, due mainly to rising fuel prices.
In a statement following the announcement, United Airlines CEO Oscar Munoz said, “Our results reflect the ongoing effect of higher fuel costs, and while we are disappointed in this outcome, we remain focused on our long-term commitment to create value for our shareholders.”
United’s fuel costs were more than two billion US dollars higher than the previous quarter, resulting in their second quarter pre-tax loss. Despite the pre-tax loss, United is planning for a positive second quarter result, with an estimated profit of $100 million.
This profit projection is partly due to strong passenger numbers and additional cost-saving measures such as adjusting flight schedules and redeploying aircraft to higher demand markets.
Further, United Airlines is also increasing its focus on new revenue streams such as credit card partnerships, loyalty program engagement, and additional fee-based products.
These new streams of revenue should help United Airlines to remain profitable despite rising fuel costs and other macroeconomic factors. The airline is also continuing to look at fuel hedging strategies, and other cost-reduction initiatives.
Overall, investors remain confident in United Airlines and its ability to remain profitable in spite of the difficult economic times. However, these results demonstrate the need for airlines to remain diligent in their cost control strategies, and focus on developing new sources of revenue.