Home / Business and Economy / United Airlines Faces Fuel Cost Squeeze
United Airlines Faces Fuel Cost Squeeze
19 Jul
Summary
- United Airlines reported Q2 earnings and revenue exceeding analyst expectations.
- Higher fuel costs are projected to reduce Q3 adjusted earnings by $1.12 per share.
- The airline expects to recover 80%-90% of higher fuel costs in Q3.
United Airlines Holdings Inc. announced second-quarter financial results that exceeded analyst expectations for both earnings and revenue. The airline reported second-quarter revenue of $17.67 billion, surpassing the consensus estimate, and adjusted earnings per share of $1.99, ahead of the $1.87 per share expectation.
However, the carrier cautioned that anticipated increases in fuel costs and capacity limitations are expected to affect near-term results. Fuel costs have risen significantly, with an additional $575 million incurred since early July, which is projected to reduce third-quarter adjusted earnings by approximately $1.12 per share.
Looking ahead, United Airlines provided guidance for third-quarter adjusted earnings between $2.50 and $3.50 per share. The company anticipates recovering 80% to 90% of its higher fuel costs in the third quarter, with full recovery expected by the fourth quarter, despite projecting nearly $6 billion in additional fuel expenses for the year.
United ended the second quarter with $19.6 billion in liquidity and took steps to reduce debt by prepaying about $1 billion of higher-cost borrowings. The company also updated its full-year 2026 adjusted earnings guidance to a range of $9 to $11 per share.
