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CHICAGO (Reuters) – United Airlines Holdings (NASDAQ:UAL) Inc on Monday raised its revenue estimate for the current quarter despite trimming capacity, underscoring a booming travel demand.
The Chicago-based carrier now expects total revenue per available seat mile to be up 23%-25% from the same period in 2019, up from a prior forecast of 17%.
Last month, the airline said it expects to generate the highest quarterly revenue in its history in the quarter through June, helping it return to profit.
While the surge in bookings is largely driven by leisure travelers, office repoenings and easing border restrictions have bolstered the industry’s outlook.
Last week, United said this summer is expected to be the busiest since the pandemic. It estimates nearly 5.3 million customers will fly with United during the Fourth of July holiday period.
Strong consumer demand is also helping United and other carriers deal with soaring fuel costs, which have more than doubled in the past year.
United also raised its fuel bill estimate for the quarter by 17%. It is now projected to increase by about 40% from the first quarter of this year.
Non-fuel operating expense is also expected to be higher than the previous estimate, the company said. United, however, still expects an adjusted operating margin of 10%.
The company has adjusted its plans to ramp up capacity. In the current quarter, it now expects its capacity to be down 14% from pre-pandemic levels.
