Airlines have new reasons to raise fares
In yet another sign that airlines will soon be raising fares: United Continental Holdings Inc. and US Airways Group Inc. posted fourth-quarter profits that beat analysts’ estimates, reported Bloomberg.
Profit excluding one-time items at United Continental was US$160 million, or 44 cents a share, after the October merger of United and Continental airlines formed the world’s largest carrier.
US Airways, No. 5 in the US, reported net income of $28 million, or 17 cents.
Both carriers’ shares rose.
“A rebound in travel demand is allowing airlines to boost prices while benefiting from capacity cuts that have helped leave planes at their fullest in more than 60 years. Higher fares also temper the fallout from a jump in rising prices for fuel, which is one of the industry’s biggest costs,” Bloomberg said.
The adjusted profit exceeded the 24-cent average estimate of 14 analysts surveyed by Bloomberg.
Revenue of $8.43 billion also topped analysts’ projections.
US Airways posted a 6.6 percent increase in revenue for each seat flown a mile, an industry benchmark, and sales increased 11 percent to $2.91 billion, matching estimates.
Net income at the Tempe, Arizona-based airline beat analysts’ projections for 6 cents a share. US Airways reported a $79 million net loss, or 49 cents, a year earlier.
By David Wilkening
David
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