United expects pre-tax margin of 14% in 2Q2016, revenue expected to decline

United Airlines stated (11-Jul-2016) it expects a pre-tax profit margin of 14% in 2Q2016, while consolidated passenger unit revenue is projected to decline 6.50% to 6.75% year-over-year. The carrier said the decline was primarily impacted by a strong US dollar, lower surcharges, travel reductions from customers affected by declining oil prices, competitive actions and passenger demand not growing at the same pace as industry capacity. Consolidated passenger unit revenue result was near the top end of the initial guidance range, which it attributes to better international yields than originally expected, as well as an increase in business travel in the final week of Jun-2016. United expects a total 2Q2016 hedge loss of approximately USD0.03 per gallon, or approximately USD30 million in total. The carrier also noted capital expenditures are lower than previous guidance, due to the timing of certain non-aircraft projects shifting to later in 2016. [more - original PR]