United will reduce flights at Newark airport after recent disruptions

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United Airlines said Thursday it will reduce flights to metro New York area airports by 5 percent next month as recent flight disruptions cost it margin by about 1 point during the second quarter.

The Chicago airline is trying to improve reliability at the airport in Newark, New Jersey, an important hub for the carrier, by cutting flights to 390 per day. United had already reduced from 435 daily flights to 410 to avoid delays and cancellations.

Reducing capacity will increase the airline’s cost of flying 1 mile per seat by 1-2 percent, rather than remaining stable, as the carrier estimated three months ago. However, executives told investors that the benefits would outweigh the costs.

“Nothing is as costly as running an operation off-schedule,” said chief executive Scott Kirby.

Still, the disruptions didn’t stop the airline on Wednesday from reporting record adjusted earnings per share of $5.03 between April and June. Second quarter revenue increased 20 percent to $13 billion compared to the same period last year. United forecast adjusted earnings per share of $11 to $12 this year, which would push the low end of its guidance range above $10.

Customers continued to book tickets, especially to foreign destinations. While United’s revenue from domestic travel rose 8 percent to just under $8 billion, revenue from Europe travel rose 42 percent to $2.6 billion. Revenue from travel to Pacific destinations grew 161 percent to $1.1 billion.

Newark is critical to United’s plan to capitalize on demand for international travel. President Bret Hart said the airline is focused on ensuring that aircraft can recover quickly after weather disruptions to its schedules.

In addition to cutting flights to Newark, United plans to add gates at the airport, while increasing the number of jets flying to and from New Jersey instead of going to other destinations, to prevent local disruptions from spreading to the wider network. The carrier plans to upgrade the technology it uses to redeploy crew members when flights are canceled and work more closely with the US Federal Aviation Administration, which runs air traffic control.

Kirby criticized the FAA last month after the disruptions, but Hart said United is supporting an FAA reauthorization bill before Congress that would fund the agency, which is “one of the best investments we can make” for the traveling public.