United Airlines stocks rise on higher Q2 forecast

Shares of United Airlines notched a higher turn after the bell on Monday after the company raised its revenue estimate for the current quarter.

The Chicago-based carrier gained 3.31% or 1.44 points to $44.98 per share. It extended its upturn of 0.62% or 0.27 points to $43.54 per share in the regular trading session. This movement added $470.49 to the firm’s market valuation.

United Airlines now anticipates total revenue per available seat mile to be up 23.00% to 25.00%. This projection is compared to the same period in 2019, up from the previous guidance of 17.00%.

In April, the firm said it expects to generate the highest quarterly revenue in its history in the quarter through June. This optimistic forecast would help the business return to profit.

The adjusted Q2 outlook underscored the booming travel demand, spurred by a strong recovery from the pandemic slump. Subsequently, leisure travelers, office reopenings, and easing border restrictions have boosted the industry’s outlook.

Last week, United Airlines mentioned that this summer would be the busiest since the onset of the health crisis. The carrier forecasts that 5.30 million customers will fly with the airline during the Fourth of July holiday. It also affirmed a 10.00% operating margin for the second quarter.

United Airlines raises fuel bill estimate

Moreover, United Airlines also increased its fuel bill estimate for the quarter by 17.00%. It estimated the cost to climb by about 40.00% from the first quarter of this year.

Nevertheless, the strong consumer demand helps the firm and other carriers deal with the mounting fuel prices.

In addition, the business anticipates that non-fuel operating expenses will be higher than the previous estimate. Then, it has adjusted its plans to ramp up capacity, expecting only a 14.00% decline from pre-pandemic levels.

Since the start of the year, United Airlines’ shares skidded 4.29% or 1.95 points to $43.54 per share.