Strong travel demand pushed United Airlines Holdings second-quarter profit up more than 50% from a year ago, despite continued challenges from the grounding of the Boeing 737 Max.
United did not break out how the grounding, now in its fifth month, affected its bottom line but said it signed an agreement to buy 19 used Boeing 737-700 planes, older jets that it can use to meet growing demand. It expects those planes to be delivered in December.
The Boeing 737 Max planes have been grounded worldwide since mid-March following two fatal crashes — one in Indonesia in October and another in Ethiopia in March — that killed a total of 346 people. Regulators have not said when they expect to allow the planes to fly again, forcing airlines to cancel thousands of flights during the peak summer travel season and through the fall.
Airlines have scrambled to meet demand by combining flights and making other schedule tweaks.
On Friday, United removed the planes from its schedule through the start of November, with no end in sight to the grounding. United, which has 14 737 Max 9 jets, had expected the planes to return by Labor Day. American Airlines on Sunday also took the planes out of its schedules until early November, a move that would mean the cancellation of about 115 flights a day. American has 24 Boeing 737 Max jets in its fleet.
Delta Air Lines, which does not have the troubled plane in its fleet, said it has marginally benefited as rivals' operations are hamstrung from the grounding.
In the three months ended June 30, net income rose 54% to $1.1 billion, or $4.02 a share, from $683 million, or $2.48 per share a year ago. On an adjusted basis, it earned $4.21 a share, beating analysts' expectations of $4.09 a share.
Revenue rose close to 6% from a year ago to $11.4 billion, slightly above the $11.36 billion analysts had forecast, as demand for seats in every region where it operates climbed in the busy travel period.
The Chicago-based carrier also raised the low-end of its profit forecast for the year to $10.50 to $12 per share from an estimate of as low as $10 a share.
Executives from the second-largest U.S. carrier will hold a call with analysts on Wednesday at 10:30 a.m. ET, when they will likely face questions on how the grounding of the Boeing 737 Max could affect its operations through the end of the year.
Shares were up 0.6% in postmarket trading.
American and Southwest report second-quarter results on July 25.
