The parent company of United Airlines, the U.S. industry's third-largest by passenger traffic, reported earnings of 41 cents per share, excluding special items, beating analysts' consensus forecast of 38 cents.

Revenue of $8.4 billion was up 2.7 percent year-over-year, slightly above the average estimate of $8.38 billion. Passenger unit revenue, which measures sales relative to flight capacity, was flat, in line with the Chicago-based company's estimate.

United estimated a 1 to 3 percent increase in that closely watched measure in the second quarter.

Higher fuel costs and recent labour agreements led to a 5.1 percent increase in unit cost per available seat mile from the year-ago period.

"In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building. It is obvious from recent experiences that we need to do a much better job serving our customers," Chief Executive Oscar Munoz said in a statement.

United is recovering from a public relations debacle after a passenger, Dr. David Dao, was dragged from his seat off the plane in O'Hare International Airport to make space for crew members.

"The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the centre of everything we do," Munoz said.

United shares edged up 0.9 percent after closing up 2.46 percent at $70.77.

(Reporting by Alana Wise; Editing by Richard Chang)

By Alana Wise