Houston Chronicle

United Continenta­l Holdings expects weakness in its pricing power.

- By Michael Sasso

United Continenta­l Holding is still suffering from a summer fare war.

A key gauge of pricing power will slide anew in the last three months of the year with a drop of 1 percent to 3 percent, the airline said Wednesday as it reported earnings. That’s after a third-quarter decline of 3.7 percent in passenger revenue for each seat flown a mile, or unit revenue — a drop that halted a shortlived recovery.

The forecast underscore­s United’s slow rebound after chopping fares as Chief Executive Officer Oscar Munoz and President Scott Kirby sought to win back customers, battle discounter­s and ramp up flights and seats.

The added supply is another potential drag on prices and United is planning a 3.5 percent capacity expansion in the fourth quarter. That’s at the high end of a full-year estimate it gave in July, and a faster pace than rivals.

“The capacity was what jumped out to me,” said Susan Donofrio, an analyst at Macquarie Group, who said analysts were expecting slower growth. “Investors aren’t going to like it.”

United shares declined slightly after the close of regular trading Wednesday.

The severe storms that struck the southern U.S. and the Caribbean reduced pretax income in the third quarter by $185 million, United said. The company was forced to close its Houston hub for days because of severe flooding caused by Hurricane Harvey.

Profit fell to $669 million from $965 million. Adjusted third-quarter profit dropped to $2.22 a share, exceeding the $2.19 average of analyst estimates compiled by Bloomberg. Revenue at Chicago-based United was little changed at $9.9 billion, in line with expectatio­ns.

The airline’s stock seesawed in recent months. In late July the shares tumbled the most in almost a year after a disappoint­ing revenue outlook. Earlier this month they surged after indication­s that big airlines were regaining pricing power.

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