Lates News

United Airlines (UAL.O) expects its fourth-quarter profit to fall short of market expectations. This highlights that despite still-strong demand for air travel, soaring jet fuel prices continue to erode airlines' profits. The company expects fourth-quarter adjusted earnings per share of between $0.50 and $1.50, below the analysts' average estimate of $1.88. In the previous quarter, the company's fuel spending surged 61.6% to $4.84 billion. The guidance assumes jet fuel prices will rise from an average of $3.90 per gallon in the third quarter to $4.80. For an aviation industry still struggling to absorb billions of dollars in extra costs caused by the Middle East war, this is undoubtedly another blow. High fuel costs could offset the gains U.S. airlines are reaping from higher fares and strong spending by affluent travelers. To cope with rising costs, airlines are increasingly raising ticket prices and cutting flight schedules, but there is currently little sign that this cost pressure will ease in the near term.