United Continental estimates drop in passenger revenue
(Reuters) - United Continental Holdings Inc, parent of United Airlines, estimated its passenger revenue for the current quarter to fall 1 percent to 2 percent.
The estimate comes just weeks after the company cut its capacity outlook for the rest of the year, citing a slowing U.S. economy and rising fuel costs.
The world's largest airline on Thursday estimated total consolidated capacity to fall 1.4 percent in the third quarter ending September 30.
Consolidated passenger revenue rose 9.2 percent in the year-earlier quarter.
United bought Continental in a $3.17 billion all-stock deal in 2010, creating the world's largest air carrier, amid volatile fuel prices and overcapacity in the industry.
The merged company, however, has struggled to integrate operations smoothly.
Over the past two years, U.S. airlines have merged, cut back flights to match demand and added charges for baggage and food to boost earnings.
But rising fuel costs continue to be a concern as the travel industry enters its typical seasonal slowdown in the fall. Oil prices moved higher on Thursday morning, with U.S. crude trading up 1.15 percent at $91.13 a barrel.
United estimated its consolidated fuel price, including the impact of cash-settled hedges, to be $3.18 per gallon for the third quarter, the company said in a regulatory filing.
The company expects to end the third quarter with $6.6 billion of unrestricted cash, cash equivalents and short-term investments.
United Continental's shares, which have shed 16 percent of their value in the last three months, were down 3 percent at $19.52 on Thursday morning on the New York Stock Exchange. (Reporting by Bijoy Koyitty in Bangalore; Editing by Supriya Kurane)