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United Airlines Stock Jumps On Q3 Revenue Forecast Boost As Travel Boom Extends Into Autumn

"Exiting a robust summer, United continues to see a strong demand environment and now expects third quarter 2022 total operating revenue to be up around 12% versus third quarter 2019," the carrier said in a Wednesday SEC filing.

Updated at 10:37 am EST

United Airlines Holdings  (UAL) - Get Free Report shares moved higher Wednesday after the carrier lifted its third quarter revenue growth forecast amid a big decline in jet fuel costs and improving travel demand. 

In an investor update filed with the Securities and Exchange, United said it sees third quarter capacity trending "higher than originally expected" at levels that only 10% to 11% lower than in the pre-pandemic period of 2019.

Strong demand and more aggressive pricing, however, will mean operating revenues are likely to be 12% higher than in the third quarter of 2019, United Airlines said.

The U.S. Transportation Security Administration, in fact, said Tuesday that it screened 8.76 million passengers over the four-day Labor Day weekend, the best holiday tally since 2019.  

With global oil prices at a seven-month low, United said its third quarter fuel costs will average around $3.83 per gallon, down from the near record high of $4.18 per gallon tallied over the three months ending in June.

That should help margins improve to around 10.5% when compared to 2019 levels, the carrier said. CEO Scott Kirby told investors in July that he was "as confident as ever' that United would meet its 9% adjusted pre-tax margin target next year. 

United Airlines shares were marked 2% higher in early Wednesday trading to change hands at $37.38 each.

United swung to profit over the three months ending in June, its first since without federal government support since the 2020 pandemic, but its adjusted earnings of $1.45 missed Street forecasts by more than 50 cents. 

Revenues were solid at 12.1 billion, but a 45% surge in fuel costs, as well as ongoing staff and pilot shortages, ate into its bottom line.

United said at the time that it expects the ongoing travel boom to "more than offsetting economic headwinds — leading to expected revenue and earnings acceleration in the third quarter," but won't increase capacity as it works to build staffing levels and keep a lid on costs.