United Airlines says its third-quarter profit dipped 15% but revenue trends are looking up

United Airlines on Tuesday reported that its third-quarter profit fell 15% from a year ago but revenue trends improved thanks to low-fare carriers scaling back their growth plans for the rest of the year.

The Chicago-based airline’s directors, meanwhile, approved up to $1.5 billion to buy back shares.

United said that by September, it was seeing more strength in corporate, premium and no-frills basic economy travel.

Airline executives have complained about budget airlines cutting prices on economy-class seats because of a glut of flights. Their pricing power is improving, however, as Spirit, Southwest and others trim their schedules and reduce the supply of seats for sale.

United said a closely watched figure, revenue per seat, turned positive compared with last year on flights within the United States in August and September after lagging 2023 levels in earlier months.

The share-repurchase program is United’s first since 2020, when airlines were barred from buying back their own stock as a condition of getting more than $50 billion in pandemic-relief aid from the federal government.

CEO Scott Kirby said it will be “a measured, strategic share repurchase program,” but it was blasted immediately by the Association of Flight Attendants. The union is stuck in long-running contract negotiations with United over pay and benefits, and it sees the buyback plan as a sop to rich investors.

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“Stock buybacks are a sickness that hurts workers and consumers alike,” said the union’s president, Sara Nelson. She suggested that United was reacting to hedge fund Elliott Investment Management’s bid to win control of the board at Southwest Airlines, “and now United Airlines management is following their lead to manipulate the stock and cheat workers and passengers.”

United posted a third-quarter profit of $965 million, down from $1.14 billion a year earlier. Excluding special items, the airline said its adjusted earnings were $3.33 per share, beating the average forecast by analysts of $3.17 per share, according to FactSet.

Revenue rose 2.5% to $14.84 billion, topping the analysts’ average forecast of $14.77 billion. United carried more passengers for more miles than a year earlier, but because of weak pricing for economy-class tickets, they paid 1% less per mile, compared with last year.

Labor costs rose more than 10%, but lower prices caused the airline’s fuel spending to drop by a similar percentage.

United forecast fourth-quarter earnings of $2.50 to $3 per share, in line with analysts’ average prediction of $2.76 per share.

Shares in United Airlines Holdings Inc. were down about 0.5% in after-hours trading following the earnings report.