United Airlines, Spirit Airlines and Delta Air Lines have all released revised outlooks for their respective third-quarter 2017 financial performance, with United in particular projecting a four-point drop in its pre-tax margin guidance for 3Q 2017.

Chicago-based United lowered its pre-tax margin forecast for the 2017 third quarter to 8%-10%, compared to its prior guidance of 12.5%-14.5%. Additionally, the airline lowered its PRASM guidance four points to a 3%-5% loss in revenue for the quarter, citing several factors for the loss in revenue. Factors include the operational and financial impact of Hurricane Harvey last month at United’s second-largest hub, Houston’s George Bush Intercontinental Airport (IAH), a tepid response in the marketplace to United’s basic economy pricing, increasingly competitive pricing from Ultra LCC carriers, higher fuel prices and geopolitical tensions in the Korean peninsula.

United said its operations at IAH were suspended for over four days with over 7,400 flights canceled, but all facilities at the airport are now open and the airline expects to operate at full schedule by Sept. 8. The airline acknowledged local demand will be impacted in the near-term, but said for connecting customers “it’s business as usual” at IAH. The company anticipates some additional financial impact in the fourth quarter dependent on the pace of recovery on local IAH demand. 

Florida-based ULCC Spirit Airlines also updated its financial outlook for the third quarter, revising its 3Q TRASM to be down 7%-8.5%, compared to the company’s previous guidance of a 2%-4% drop. The airline estimated the negative impact from Hurricane Harvey on 3Q revenue will be approximately $8.5 million, “which includes the direct impact from canceled flights as well as an estimate for the lingering impact from a reduction in travel demand to and from the affected areas,” the company said in an SEC filing Sept. 5. Additionally, Spirit cited “a broadening of aggressive competitive pricing in our markets” as a factor in its revenue guidance revision. According to Spirit president and CEO Robert Fornaro, approximately 10% of Spirit’s network touches Houston’s IAH airport.

The factors behind Atlanta-based Delta Air Lines' third-quarter revisions were unrelated to the recent hurricane, and were instead attributable to lower-than-expected close-in domestic yields, the carrier said in its August traffic report. As a result, Delta revised its third-quarter projection for passenger revenue per available seat-mile to 2%-3% from its previous forecast of 2.5%-4.5%. Additionally, Delta lowered its third-quarter operating-margin forecast to 16.5%-17.5% from 18%-20%, attributable, the company said, to lower close-in yields and higher fuel prices.

Mark Nensel mark.nensel@penton.com