) - are cancelling thousands of flights each month since a worldwide grounding in March following crashes in Ethiopia and Indonesia that killed a total of 346 people.
The No. 3 U.S. air carrier is in the midst of a three-year plan to claw back domestic market share from rivals by building up connections through its main U.S. hubs, including Chicago, New York and San Francisco, cities that attract lots of travelers willing to fly first-class and business-class. Still, the earnings per share growth for the year is expected to be slower than in 2018 due to the MAX grounding and closed Pakistani air space, which forced United to cut its 2019 capacity growth target for a second time this year. It now expects capacity to increase between 3% and 4%, versus an original forecast of 4%-6% growth.
When the jets were first grounded in mid-March, United largely avoided flight cancellations by servicing MAX routes with larger aircraft, but as new MAX deliveries remain frozen, it estimates daily cancellations will more than double from about 40 or 45 in July to 95 in October.Total operating revenue rose 5.8% to $11.40 billion in the quarter, while closely watched revenue per available seat mile rose 2.5%, the top end of United’s guidance for growth between 0.5% and 2.
A case of inelastic demand it is.