We continue to see an unusually volatile environment for bookings
Revenue rose 10.3 percent, to $9.81 billion, while fuel costs herve leger on sale rose 30.2 percent, to $3.23 billion.
On a conference call with analysts and reporters, United Continental executives predicted demand for travel in the second half of 2011 would be consistent with that of the first half despite signs of a stalling economic recovery.
“With significant uncertainties here and abroad, we have responded appropriately, raising fares in the face of high fuel cost and reducing our planned capacity to reflect the challenging environment that we face,” said Jeff Smisek, United Continental’s chief executive.
After the March 11 earthquake and tsunami in Japan, United Continental reduced capacity by 11.8 percent on Japanese routes because of weaker travel demand. The cuts eroded second-quarter unit revenue by $100 million.
Second-quarter earnings at US Airways were $92 million, or 49 cents a share, compared with $279 million, or $1.41 a share, in the quarter a year earlier.
Excluding special charges, US Airways earned 56 cents a share, beating a Wall Street consensus forecast for discount herve leger dresses 53 cents per share.
Revenue at US Airways rose 10.5 percent, to $3.5 billion. Its fuel bill rose 53.8 percent, to $948 million.
Scott Kirby, president of US Airways, said on a conference call with analysts and reporters that while the bookings outlook is uncertain, demand is solid.
“We continue to see an unusually volatile environment for bookings,” Mr. Kirby said, noting the negative impact of political upheaval and natural disasters.
The USD index dived 1.1 percent to 73.999, the biggest daily drop this year. Treasury market yields moved sharply higher on heavy unwinding of safe-haven strategies. The 10-year U.S. Treasury yield was trading at 3.01 percent, up from 2.93 percent a day earlier.
European leaders have agreed to ease lending terms to Greece, Ireland and Portugal, while private investors would voluntarily swap their Greek bonds for longer maturities at lower interest rates to help Athens.
Total official financing for the second Greek assistance package will be around 109 billion euros, while the private sector would contribute a net 37 billion euros.
Slow progress on resolving Greece’s debt crisis has been a major headwind for the euro.
Peripheral debt rallied as yields tumbled on short-dated Greek debt, down more than 4.5 percent in the two-year segment. The more liquid Italian and Spanish debt markets also showed substantial relief.
Risk appetite was enlivened and commodity currencies also outperformed the dollar with the kiwi bulldozing a fresh 30-year peak–its third this week–at $0.8643. The Australian dollar also leapt by almost 1 percent to $1.0843.
In the United States, media reported efforts to craft a $3 trillion deficit-reduction deal had gained major traction, but was later denied by the White House.
At key was a short-term extension of the debt ceiling with a $500 billion up-front deficit cut and a commitment to a more substantial, long-term solution to America’s fiscal problems.
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