UAL forecasts higher revenue, costs
Written on March 22, 2008
United Airlines parent UAL Corp. forecast higher first-quarter unit revenue on Thursday, but also said it expects fuel costs to surge and non-fuel expenses to creep up as well.
UAL (UAUA, Fortune 500) also said it expects mainline traffic to decline 2.5% to 3% this quarter on flat capacity. Mainline operations exclude regional affiliates.
UAL forecast an increase of between 9% and 10% in mainline unit revenue during the first quarter. Unit revenue is measured by revenue per available seat mile, or RASM, which factors in dollars received for each seat flown one mile.
It also predicted "solid" unit revenue in its North American and international markets for the second quarter.
However, the Chicago-based airline company said mainline jet fuel costs will be about $2.74 per gallon, including taxes and hedging benefits payday loans lenders. That adds up to about $1.53 billion in fuel costs, based on its prediction of consuming 559 million gallons.
In the year-ago quarter, UAL spent a total of $1.04 billion on fuel, at $1.89 per gallon.
UAL predicted that mainline unit operating costs will also rise 3% to 3.5%, excluding fuel and special items.
The company reported the expectations in a Securities and Exchange Commission filing on Thursday.
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