United jumps on optimism airline profits are set to improve

United Airlines Holdings Inc. shares rose sharply after the company forecast an improved industry outlook now that carriers are cutting excess flights that suppressed profits over the summer. “There’s an incredible amount of unprofitable capacity in the US marketplace and we’ve seen that exiting at a rapid pace starting in mid-August that continues into next year,” CCO Andrew Nocella told analysts during the company’s third-quarter earnings call on Wednesday. “The changes we’ve seen so far are only actually the tip of the iceberg.” United jumped as much as 13% in New York trading Wednesday, the most since April. Shares of Delta Air Lines Inc., Southwest Airlines Co. and American Airlines Group Inc. also rose. Prices have improved “rapidly” for leisure trips thanks to carriers that are slashing money-losing flights, United executives said on the call. At the same time, revenue from business bookings is up as more employees return to working in offices and budget carriers sell more of their new and costlier premium options. United’s Q3 operating margin of 10.5% is expected to be the highest of the four largest US airlines, Conor Cunningham, a Melius Research analyst, said in a report. Delta reported adjusted operating margin 9.4% last week, while American and Southwest both are set to report results on Oct. 24.<br/>