United Airlines Cuts Profit Outlook as Jet Fuel Costs Rise

United Airlines issued a disappointing earnings outlook for the fourth quarter, driven by persistently high jet fuel expenses. The carrier now expects adjusted earnings per share to range between $0.50 and $1.50, falling well short of the $1.76 per share that Wall Street analysts had anticipated.

The downgrade stems primarily from soaring fuel costs, with United projecting jet fuel to average $4.80 a gallon. This figure sits approximately $0.45 above market consensus, a gap the airline estimates equals about $1 a share. Consequently, the high end of this guidance caps United's adjusted earnings for the year at no more than $7.22 per share, down significantly from its mid-July projections.

Stock photo for illustration only, not from the actual event

Despite profit pressures, customer demand for travel remains robust. Third-quarter revenue grew 17% to approximately $17.9 billion, supported by adjusted net income of $833 million. Premium and loyalty revenues each climbed 17%, while basic economy revenue increased by 16%. However, the airline's total quarterly fuel bill jumped by nearly 62%.

"United expects to pass on 100% of fuel costs by the end of the year."

Michael Leskinen, United Airlines CFO

Speaking on future operational adjustments, United CFO Michael Leskinen indicated in September that passengers should anticipate additional airfare increases and capacity reductions, asserting that the airline plans to pass on 100% of its fuel costs by year-end. Meanwhile, CEO Scott Kirby has maintained that higher fares will likely remain permanent even if fuel prices eventually decline, pointing to escalating labor, maintenance, and airport operating expenses.