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Kirby warns shutdown may erode confidence in government,

affecting bookings

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United's shares fall 6% amid shutdown and pricing concerns

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United plans capacity adjustments to boost margins

By Rajesh Kumar Singh

CHICAGO, Oct 16 (Reuters) - United Airlines

Scott Kirby warned on Thursday that an extended government

shutdown risks taking a toll on airline bookings as well as

flight operations.

The shutdown has entered its third week due to a political

stalemate over government funding, amplifying a long-standing

shortage of air traffic controllers. It has slowed air traffic

at times in some cities.

More than 13,000 air traffic controllers and 50,000

Transportation Security Administration officers received a

partial paycheck in recent days and will not get paid later this

month if the standoff is not resolved.

Kirby said there has not been a measurable impact from the

shutdown as a vast majority of air-traffic controllers are still

showing up to work. A greater communication and coordination

from the Federal Aviation Administration is also helping

airlines, he added.

But as the shutdown drags on, Kirby said people would start

losing confidence in the government's ability to resolve the

standoff, impacting travel bookings.

"I hope our politicians will figure out how to get in a

room, compromise, and get something done," he told analysts on

an earnings call.

United's shares were down about 6% in afternoon trade as

concerns about the shutdown as well as its pricing power

overshadowed its upbeat earnings outlook.

CAPACITY ADJUSTMENT PLANS

The Chicago-based airline has forecast a

stronger-than-expected profit in the fourth quarter as it

expects rising travel demand and improved pricing power to

produce the highest quarterly revenue in the company's history.

Its third-quarter revenue, however, fell short of Wall

Street estimates due to operational issues at Newark airport as

well as weaker unit revenue, a proxy for pricing power, in both

domestic and international markets.

The airline's unit revenue declined 3.3% year-on-year in the

domestic market in the third quarter and dropped 7.1% on

international routes. Conor Cunningham, an analyst with Melius

Research, said United's mid to high-single digit capacity

addition in all regions during the quarter hurt its unit

revenue.

United plans to fix its capacity problem. Chief Commercial

Officer Andrew Nocella said the company will adjust its summer

capacity next year, including reducing seats for the July Fourth

holiday period. It also expects to keep its transatlantic

capacity flat to negative in the third-quarter of 2026.

"We ... remain focused on refinements we can make to the

network and commercial strategies to build a stronger margin,"

Nocella told analysts.