(Reuters) - United Airlines Holdings Inc UAL.O on Tuesday reported a bigger-than-expected increase in second-quarter profit, driven by strong air travel demand and the ability to charge more for seats after the grounding of Boeing Co's BA.N 737 MAX reduced capacity.

FILE PHOTO: United Airlines first new livery Boeing 737-800 sits at a gate after arriving at O'Hare International Airport in Chicago, Illinois, U.S., June 5, 2019. REUTERS/Kamil Krzaczynski/File Photo

The three U.S. airlines that operate the MAX - United, American Airlines Group Inc AAL.O and Southwest Airlines Co LUV.N - are cancelling thousands of flights each month since a worldwide grounding in March following crashes in Ethiopia and Indonesia that killed a total of 346 people.

Chicago-based United said net income rose 54% to $1.05 billion, or $4.02 per share, in the quarter ended June 30 from $683 million or $2.48 per share a year earlier. On an adjusted basis, the airline earned $4.21 per share for the quarter. Analysts on average expected a profit of $4.08 per share, according to IBES data from Refinitiv.

The No. 3 U.S. air carrier is in the midst of a three-year plan to claw back domestic market share from rivals by building up connections through its main U.S. hubs, including Chicago, New York and San Francisco, cities that attract lots of travelers willing to fly first-class and business-class.

Citing continued strong demand, United lifted its 2019 adjusted diluted earnings per share guidance to $10.5-$12.0 versus $10.0-$12.0 previously.

Still, the earnings per share growth for the year is expected to be slower than in 2018 due to the MAX grounding and closed Pakistani air space, which forced United to cut its 2019 capacity growth target for a second time this year. It now expects capacity to increase between 3% and 4%, versus an original forecast of 4%-6% growth.

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Pakistan reopened its airspace to international civil aviation on Tuesday after months of restrictions imposed because of clashes with India, which forced long detours that cost airlines millions of dollars.

United said it was reviewing options to resume service to India in coming weeks.

But the timing of a 737 MAX return remains uncertain.

United has pulled its 14 MAX aircraft from its flight schedule until early November, though many analysts do not expect the aircraft to fly again this year. Boeing has said it will likely take until at least September to fix a fresh flaw in the 737 MAX discovered by the Federal Aviation Administration last month.

When the jets were first grounded in mid-March, United largely avoided flight cancellations by servicing MAX routes with larger aircraft, but as new MAX deliveries remain frozen, it estimates daily cancellations will more than double from about 40 or 45 in July to 95 in October.

United was expecting another 16 MAX deliveries this year.

Total operating revenue rose 5.8% to $11.40 billion in the quarter, while closely watched revenue per available seat mile rose 2.5%, the top end of United’s guidance for growth between 0.5% and 2.5%, helped by supply constraints due to the MAX grounding.

United shares were up 0.6% in after-hours trading on Tuesday. United management will host a conference call on Wednesday at 10:30 a.m. EDT.

United is the first of three U.S. 737 MAX operators to post second-quarter results, with Southwest and American due to report on July 25.

Rival Delta Air Lines Inc DAL.N, which does not operate the 737 MAX, lifted its 2019 profit forecast last week and said it was seeing a "marginal benefit" from supply constraints in the market due to the aircraft's grounding.