DALLAS: United Airlines Holdings Inc’s profit is poised to beat Wall Street’s expectations this year as the carrier works to overcome the costs from a grounding of certain Boeing Co 737 Max planes. Shares of United and other airlines climbed.

       The airline’s full-year forecast suggests a sharp turnaround after this quarter, when United expects an adjusted loss of 35 US cents to 85 US cents a share. That would fall well short of the average 21-US cent loss estimated by analysts.

       “The near-term outlook disappoints for well-understood reasons, but there’s enough on both the revenue and cost side for investors to like,” Seaport Research Partners analyst Daniel McKenzie wrote in a research note.

       Adjusted earnings will be US$9 to US$11 a share in 2024, United said in a regulatory filing.

       The midpoint topped the US$9.45 average of analyst estimates compiled by Bloomberg.

       The stronger-than-expected outlook was a relief to investors anxious about how the Max 9 grounding would compound the ongoing challenges of rising labour expenses, softening domestic travel demand and supply-chain snags.

       Rival Delta Air Lines Inc, the first major US carrier to report earnings, cited an uncertain environment this month when it backed away from its 2024 profit guidance.

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       United’s shares shot up more than 10% in early trading Tuesday – the biggest jump in nearly two years. They traded up 5.9% to US$40.71 as of 10:19am in New York. The S&P Supercomposite Airlines Index jumped as much as 5.6%, the most intra-day since Jun 27.

       The Delta report had set expectations lower for other airlines, which “helps put this United report in an even better light”, Vital Knowledge said in a market commentary newsletter.

       Fourth-quarter adjusted profit was US$2 a share, United said. That topped the US$1.69 average of analyst estimates compiled by Bloomberg. Revenue was US$13.63bil, while estimates were for US$13.54bil.

       United chief executive officer Scott Kirby said in a statement that the company set operational records last year despite “unpredictable headwinds”.

       Non-fuel unit expenses in the current quarter will rise by mid-single digits, with a three-percentage-point negative impact if its Max 9 jets remain grounded through Jan 31.

       The outlook underscores the volatility caused by Boeing’s crisis. US safety regulators grounded all Max 9 aircraft earlier this month after a panel blew out the side of an Alaska Airlines plane in midair. United is the largest operator of the model, with 79 in its fleet.

       Regulators haven’t indicated how long the Max 9 is expected to remain parked.

       The agency is reviewing findings from inspections of an initial batch of Max planes to determine if Boeing’s procedures are sufficient to allow the fleet to return to flying. The Federal Aviation Administration subsequently ordered inspections of another model, the 737-900ER.

       Some analysts were more sanguine on United’s outlook.

       “We are more focused on the near-term outlook given the company’s exposure to Boeing 737 MAX 9, exposure to Israel and potential delivery delays as Boeing works through its various issues,” Michael Linenberg, a Deutsche Bank analyst, said in a note. — Bloomberg