(United Airlines Holdings Inc. warned it will post a surprise loss this quarter as it grapples with high labor costs.
The adjusted loss for the first three months will be 60 cents to $1 a share, the Chicago-based airline said in a filing with the Securities and Exchange Commission Monday. Analysts had expected a profit of 69 cents a share, according to the average of estimates compiled by Bloomberg.
The latest projection marks a sharp turn from January when United forecasted profit in the first quarter of as much as $1 a share. The company now anticipates expenses from a potential new collective bargaining agreement with its pilot's union to accrue this quarter rather than next quarter.
The airline, which is set to address investors Tuesday at an industry conference, left unchanged its 2023 per-share earnings target of $10 to $12.
United’s shares slid 5.6% in extended trading at 5:02 p.m. in New York. The stock had soared 30% this year through Monday’s close amid optimism about the global travel recovery.
The company is the latest US airline to acknowledge the hefty costs of new labor agreements, as rivals including American Airlines Group Inc. talk with their respective unions. Delta Air Lines Inc., whose pilots approved a new contract this month, surprised investors in January with a worse-than-expected first-quarter profit forecast due to higher labor expenses.
United’s loss prediction sullied an otherwise largely optimistic update, with the carrier saying operating revenue in the first quarter will be up 51% from the prior year in a “strong demand environment.” It also said the second quarter is shaping up better than expected.
United Airlines Holdings Inc. became the latest US carrier to increase fees for checked bags as the industry faces inflationary pressures for labor and other rising expenses.View Article
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