United Airlines has said its results for the third quarter are “not at the level we expected or deem acceptable” after selling too many cheap seats.
The US-based carrier – which includes the merged Continental Airlines – earned $379 million during the period, or 98 cents per share.
This compares to a profit of $6 million, or two cents per share in the same quarter a year ago.
Traffic fell slightly in the most recent quarter, and is down one per cent for the year.
However, chief executive Jeff Smisek pointed to erroneous demand forecasting as a cause for concern.
United sold seats at below the price they could have obtained over the summer, Smisek said, lowing profit margins.
A fleet redeployment hurt revenue, as well as increased competitive pressure in China, the dollar-yen exchange rate and generally high costs also played a role.
“We have significantly improved our operations, customer service and product, and are now competitive on all those dimensions.
“I want to thank my co-workers as we work together to deliver on our promise of making United flyer friendly,” said Smisek.
“However, we are not satisfied with our financial performance, and are taking prompt actions to increase our revenue and operate more efficiently across the company.”
For the third quarter, total revenue was $10.2 billion, an increase of 3.2 per cent compared to the same period in 2012.
Third-quarter consolidated passenger revenue increased 1.6 per cent year-over-year to $8.9 billion, on a consolidated capacity decrease of 1.1 per cent year-over-year.
Other revenue in the third quarter increased 25.0 per cent year-over-year to $1.1 billion and third-quarter cargo revenue decreased 19.1 per cent versus the third quarter of 2012 to $199 million.