Economy

Harvey, North Korea Weigh On United; Airline Slashes Outlook

Harvey, North Korea Weigh On United; Airline Slashes Outlook”

United Continental (UAL) on Wednesday issued a weaker outlook for the third quarter, citing the impact of Hurricane Harvey and geopolitical tensions related to North Korea.

Previous guidance had been for flat PRASM, between up 1% and down 1%.

United now projects flight capacity will be slightly lower, between 3 percent and 3.5 percent, from its earlier forecast of 4 percent.

Officials from George Bush Intercontinental Airport, United's second-largest hub, are advising passengers to check the facility's website for the status of their flight.

After the chaos Hurricane Harvey caused in Texas and Louisiana, officials from United Airlines have announced that all scheduled flights to and from Houston will begin operating by Friday.

"Look, we lost a lot of revenue", Levy said at the conference, adding that the carrier will only be able to recoup a small amount of the losses in other markets. By Wednesday, numerous flights and cruises were canceled, but as Irma's path becomes clearer in the next few days, more cancellations are likely, costing the industry millions of dollars more on top of already soaring costs.

"Local demand for obvious reasons went away", he said, while United retained some but not all of the traffic that would have connected over Houston.

Besides 150 basis points of Harvey impact, Levy said, implementation of basic economy fare is responsible for 100 basis points of decline; fare competition with ultra-low-cost carriers is responsible for 100 basis points; and declines in the Pacific are responsible for 50 basis points. United has cancelled San Francisco-Hangzhou service effective October 14.



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