The persistent demand for air travel, as stated by United Airlines Holdings Inc. (UAL stock) is expected to contribute to the company’s profit until the end of the year, countering concerns of a broader economic downturn.
The airline company headquartered in Chicago announced on Tuesday that it anticipates its operating profit margin will exceed pre-pandemic levels in the fourth quarter of this year. The company cited factors such as hybrid work, which has given customers more flexibility to travel for leisure more frequently, as the reason for this expectation.
The Chief Executive Officer of United (NASDAQ: UAL), Scott Kirby, was quoted as saying in a statement that “despite mounting fears about an economic slowdown, the ongoing Covid recovery trends at United continue to prevail.”
In recent weeks, officials from airlines have been quoted as saying that concerns about the economy do not appear to have dampened appetites for travel, and that an increase in ticket costs has not discouraged customers from making reservations.
According to officials from several airlines, demand for travel during the autumn has been stable, which includes demand for vacations and leisure travel, and business travel is beginning to show signs of improvement. Last week, Delta Air Lines Inc. said that their company’s revenues got a lift following Labor Day, and by the end of September, they had grown to approximately 80% of what they expected to be for 2019.
However, airlines’ expansion has been stifled as a result of delayed jet deliveries and backlogs that have developed in the process of hiring and training new staff. This has resulted in a reduced supply of tickets. United stated on Tuesday that it believes that the growth limits facing the sector might endure for years, and that the post-Covid rebound in demand as well as more flexible work arrangements that allow for increased travel are trends that are here to stay.
United (NASDAQ: UAL) stated that it made a profit of $942 million during the third quarter of the year, which is nearly double what it brought in during the same time period a year earlier. However, this profit is down about 8% from what it was during the same time period in 2019, before the pandemic upended the industry. The operational revenue of United increased by 13.2% compared to the same period in 2019, reaching $12.9 billion.
UAL Stock Price Prediction
According to FactSet, the consensus estimate of profits for Wall Street experts was set at $2.28 per share, but United’s adjusted profit of $2.81 per share exceeded those projections. United (NASDAQ: UAL) has stated that it anticipates a profit of $2 to $2.25 per share in the fourth quarter of the year, which is a significant increase over the 98 cents per share that analysts had been expecting.
Tuesday’s trading beyond regular hours saw an increase of more than 7 percent for United shares (UAL stock).
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Author Valerie Remorosa 
