Airlines this week posted their best third-quarter results in three years as more travelers took to the skies, and spent more for their tickets.
"What a difference a year makes," Southwest chief executive officer Gary Kelly told investors. "I am extremely happy with where we are with these results," although "there are always challenges in this very difficult airline business."
The risks include rising fuel prices and the uncertain global economic recovery.
United Continental Holdings Inc., the world's largest airline company by traffic, runs both United and Continental Airlines, which merged Oct. 1.
United, in the quarter ended Sept. 30, earned $473 million, or $2.12 a share, and a year earlier lost $57 million. Continental reported net income of $367 million, or $2.24 a share, after losing $18 million a year earlier.
"We still see good demand, particularly as business travelers are coming back," said Jeffery Smisek, CEO of the new airline to be called United. "We are mindful that general macroeconomic trends remain uncertain and fuel prices have increased considerably lately."
Jet fuel prices are up more than 11 percent since mid-August, said Zane Rowe, chief financial officer of the new United. "The next couple of quarters will be more challenging. We are heading into a seasonably weaker period, and oil prices have risen."
Airlines hope to keep planes full, and ticket prices higher, by not adding back too much capacity to their routes. "We remain committed to capacity discipline," Smisek said. "We will not grow for growth's sake, but only if we can maximize our profitability by doing so."
