Passenger revenue forecast to rise on international travel

June 19, 2007

United Airlines parent UAL Corp. said Monday that it expects a revenue benchmark to rise as much as 3.25 percent this quarter on higher international travel, while costs will increase less than forecast.

United's cost to fly each seat a mile, excluding fuel and special items, will be flat to up 0.5 percent compared with a year earlier, UAL said in a filing. Passenger revenue by that measure will rise 2.75 percent to 3.25 percent.

"Yields continue to be strong internationally but under pressure domestically, as industry capacity grows and domestic industry revenue slows," UAL said.

The new expense outlook is less than the 1 percent boost projected in May. Chicago-based UAL said last month it would pare 2007 U.S. capacity growth by 2 percent while adding 0.5 percent more flying on international routes, where demand and fares are higher and there's less low-fare competition.

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