United to trim US capacity as profits rise

United Airlines reported higher quarterly profits Wednesday but announced it would trim US capacity later this year as the industry contends with a seat glut that has pressured fares.

Profits at the major US carrier came in at $1.3 billion in the second quarter, up 23 percent from the year-ago period following a six-percent rise in revenues to $15 billion.

While airlines have described travel demand as still robust, carriers have pointed to an excess number of available seats that have pressured fares in the United States.

United described mid-August as a turning point, with published schedule changes showing about a three-percent decline in the industry capacity growth rate, the company said in its news release.

"We see multiple airlines have begun to cancel loss-making capacity," said Chief Executive Scott Kirby. "United has long been preparing for the moment when industry-wide domestic capacity would adjust -- it's now clear that inflection point is just 30 days away."

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United, which saw capacity rise 8.3 percent in the second quarter, now plans to reduce capacity in the fourth quarter compared with its prior plans.

The company projected third-quarter profits of between $2.75 and $3.25 per share, below the $4.14 in the second quarter.

The airline affirmed its full-year profit forecast range, however.

United's shares declined 1.3 percent in after-hours trading.

Source: AFP