United Airlines warned on profits for the current quarter Tuesday and of waning air travel demand. Several other airlines also gave lackluster guidance, but JetBlue Airways bucked the trend. Airline stocks traded mixed Tuesday.
For the current first quarter, United expects to lose 60 cents-$1 a share. Analysts were expecting EPS of 64 cents.
Demand in January and February was lower than expected, while oil prices and fuel spreads "have remained elevated," the carrier said in a regulatory filing.
Southwest Airlines, Alaska Airlines and Spirit Airlines also gave weak to lackluster guidance.
Alaska reaffirmed capacity guidance but hiked its fuel cost outlook. Spirit expects capacity to be slightly lower than expected prior, primarily due to an increase in unscheduled engine removals.
JetBlue, which faces resistance from the U.S. Department of Justice over its attempted $3.8 billion takeover of Spirit Airlines, ran against the grain. The airline now expects 8%-9% growth in available seat miles, vs. 5.5%-8.5% prior. It forecasts 32%-35% revenue growth for the quarter, vs. 28%-32% prior.
"JetBlue continues to experience robust travel demand trends, which strengthened into Presidents Day weekend and beyond," the company said in a regulatory filing. However, JetBlue warned of an increase in fuel prices.
The Justice Department contends that a JetBlue-Spirit combination would eliminate the low-cost competition that Spirit represents in the industry.
Delta Air Lines also maintained Q1 outlook for earnings of 15 cents-40 cents per share, with revenue 14%-17% higher than 2019 levels.
Airline Stocks
Shares of United Airlines fell 5.4% on the stock market today, while JetBlue rose 1.1%.
Southwest fell 1.7% Tuesday. Alaska lost 1.3%. Spirit added 1.1% while Delta dipped 0.6%.
Airline stocks went on a tear in early 2023. Demand for travel was expected to grow through 2023.
Impressive recent growth and strong 2023 estimates boosted hopes for the airline industry.
