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United Continental says Sandy dented October revenue, profit

A United Airlines airplane painted in its new corporate logo sits at a gate at Liberty International Airport in Newark, New Jersey, February
A United Airlines airplane painted in its new corporate logo sits at a gate at Liberty International Airport in Newark, New Jersey, February

(Reuters) - United Continental Holdings, the world's largest air carrier, said disruptions to operations including the cancellation of nearly 5,300 flights because of superstorm Sandy, reduced revenue and profit in October.

United, which operates a major hub at Newark Liberty International Airport in New Jersey, said in a statement late Wednesday that Sandy hurt revenue by about $90 million and profit by about $35 million in October.

The airline estimated that unit revenue, or passenger revenue per available seat mile, rose 0.5 percent to 1.5 percent last month compared with a year earlier. It said cancellations tied to Sandy improved unit revenue growth by about 1 percentage point.

Superstorm Sandy resulted in shutdowns at major New York-area airports and cancellations of more than 20,000 flights.

This week, another storm that brought snow and rain to the U.S. Northeast led airlines to cancel more than 2,000 flights for Wednesday and Thursday, according to the FlightAware.com tracking service. On Thursday, United and Delta Air Lines said their operations in the New York area were resuming as the region recovered from the latest storm [ID:nL1E8M80UQ].

Barclays airline analyst David Fintzen said he expects Sandy to hurt airline earnings by $150 million to $200 million collectively in the fourth quarter. This week, he raised fourth- quarter earnings estimates for most airlines he covers, citing relief from lower fuel prices.

"Fuel has actually come down enough that it more than offsets the actual earnings impact," Fintzen said.

Delta has said Sandy hurt October revenue by $45 million and likely shaved about $20 million from October profit. New York-based JetBlue Airways said it expected "material" fourth-quarter effects from Sandy with short-term flight demand likely weakening as customers look to rebuild.

Shares of major airlines rose on Thursday, with United Continental gaining 2.1 percent to $20.96, and Delta up 2.3 percent at $10.17.

(Reporting by Karen Jacobs in Atlanta; Editing by Maureen Bavdek)

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