Amid surging fuel costs, strong travel demand and higher ticket prices boosted third-quarter profits of United Continental Holdings, the parent company of United Airlines, by nearly 30%, boosting the profit outlook for this year.
Shares in United airlines' parent company rose more than 5% in after-hours trading after the results for the quarter ended Sept. 30 were released on Tuesday.
In the third quarter, United's net income (including the summer travel season) rose 29.6% from a year earlier to $863 million, on revenue of about $11 billion, an increase of more than 11% over the same period last year.
Oscar Munoz, co-chief executive, said in a statement that he was "more confident than ever" that the airline could meet its adjusted earnings per share target of between $11 and $13 by 2020.
At the same time, United Airlines also said that its fuel costs increased by more than 35% in the quarter.
But revenue per available seat kilometer (a key measure of the number of seats in an airline) increased by 6.1% in the July-September quarter from a year earlier.
According to the average forecast of analysts polled by Refinitiv (formerly Thomson Reuters), United reported adjusted earnings per share of $3.06, slightly lower than the expected $3.07 per share.
United raised its full-year profit forecast to $8.25 a share from $7.25 a share to $8-$8.25 a share.
United Airlines, which has been volatile this year, stands out from the competition with its Tata American Airlines. So far this year, the company's shares are up about 24%, the highest of all American airlines. Although investors were sceptical about an aggressive growth strategy announced earlier this year, United's profits eventually exceeded expectations in the first half of the year.
In addition, among the other three major airlines, Delta's third-quarter profit beat Wall Street expectations, down more than 5% so far this year. Shares of American airlines and southwest airlines, which report third-quarter earnings on Oct. 25, are down 36% and 10% respectively so far this year.