United Airlines expects fourth quarter earnings per share of $0.50 to $1.50, below expectations.

United Airlines (UAL.US) expects its fourth-quarter earnings this year to fall below market expectations. This highlights that although air travel demand remains strong, soaring jet fuel prices continue to erode airlines’ profits. The company anticipates adjusted earnings per share for the fourth quarter to be between $0.50 and $1.50, below the analysts' average expectation of $1.88. In the previous quarter, the company's fuel expenditure surged by 61.6% to $4.84 billion. This earnings guidance assumes that jet fuel prices will rise from an average of $3.90 per gallon in the third quarter to $4.80 per gallon. For the airline industry, still struggling to absorb the billions of dollars in extra costs caused by the Middle East war, this is undoubtedly another blow. High fuel costs may offset the gains American airlines receive from higher ticket prices and strong spending by affluent travelers. In response to rising costs, airlines are increasingly raising ticket prices and reducing flight schedules. However, there are currently few signs that this cost pressure will ease in the short term.