CHICAGO – United Airlines is making money after a slow start to the year.
The airline’s net income in the second quarter hit $789 million, topping Wall Street expectations and marking a turnaround from the first quarter when United was the only major U.S. carrier to report a loss.
The company also said Thursday that it will buy back up to $1 billion in shares over the next three years.
Shares of United Continental Holdings Inc. jumped $2.60, or 5.7 per cent, to $48.60 in morning trading.
United has struggled to overcome technology glitches and other problems since the 2010 merger of United and Continental. The Chicago airline lost $609 million in the first quarter as it suffered through 35,000 weather-related flight cancellations. American, Delta and Southwest were posting strong results at the same time.
But United closed the gap in the second quarter at the beginning of the peak summer-travel season.
So-called ancillary revenue — extra fees for things like checked bags and roomier seats — rose 8 per cent per passenger.
United seems to be turning the corner, said Cowen and Co. analyst Helane Becker.
“The outlook for the company continues to improve,” Becker wrote, citing the company’s forecast of revenue per mile in the third quarter.
In the second quarter, United said that excluding special items, it would have earned $2.34 per share in the April-to-June quarter. Analysts surveyed by FactSet were expecting $2.19 per share.
Revenue rose 3.3 per cent to $10.33 billion, slightly higher than Wall Street forecasts. Fuel and labour costs each grew about 1 per cent.