United Airlines parent UAL Corp. today posted a third-quarter net loss of $1.8 billion, nearly all of which was generated by one-time reorganization items as the company continues its Chapter 11 overhaul. Excluding one-time items--including $1.7 billion in non-cash aircraft rejection charges--UAL's net income was $68 million. The company said operating earnings improved by $245 million over last year to come in at $165 million, despite a $405 million increase in total jet fuel costs.
United reported a 5 percent jump in mainline passenger revenue, an 11 percent increase in unit revenue and a 9 percent improvement in passenger yield. A systemwide capacity reduction of 5 percent outpaced a traffic reduction of 3 percent, which pushed load factor 2 points higher to 84 percent.
On the expense side, cost per available seat mile rose 5 percent on higher fuel costs. Most expense cost items, however, were lower year over year. In fact, United said CASM in the third quarter, excluding fuel and one-time items, was 7.11 cents, compared with 8.67 cents in 2000, the last time UAL posted a full-year profit. Meanwhile, aircraft utilization was 4 percent higher as the airline continued to redeploy planes from domestic routes to international ones.
"The results we are reporting make it clear that we have done well this quarter in overall cost control, especially given the significant reduction in capacity," said chairman, CEO and president Glenn Tilton.
"Our restructuring is largely complete," added CFO Jake Brace. United is planning to emerge from bankruptcy court protection in early February 2006, ending a Chapter 11 restructuring of more than three years.
Looking ahead, United said it expects capacity to drop 3 percent during the current quarter.
The company joins American Airlines parent AMR Corp., Northwest Airlines and AirTran Airways in the red, while Continental, Southwest, JetBlue and Alaska airlines each managed to post profits for the quarter
(BTN, Oct. 31). Neither US Airways nor bankrupt Delta Air Lines have yet reported third-quarter financial performance.