Corporate revenues at United Airlines increased 4 percent year over year during the fourth quarter, though low oil prices are beginning noticeably to affect demand from the energy sector, executives said during their earnings call on Thursday.
United chief revenue officer Jim Compton said that while the carrier is "really comfortable with the demand levels" in the short term, United, which has a hub in major energy center Houston, in the fourth quarter saw "a small impact" on energy-related corporate traffic. Even so, consolidated passenger revenue per available seat mile was up slightly in the quarter.
"Today, our corporate teams are in discussion with those companies about what they're seeing in 2015," Compton said. "They are looking at all their costs as they react to lower prices in their industry. We've seen just a small impact in corporate business that we can measure closely but will stay on top of it as we go through the year."
On the other side of the fuel coin, United president and CEO Jeff Smisek echoed Delta Air Lines executives' comments from earlier this week that the carrier has no intention of boosting capacity in response to lower fuel costs, which helped lower consolidated cost per available seat mile 5.3 percent year over year during the quarter. The extra profit from lower fuel costs will be used "to accelerate long-term goals," including reducing financial leverage, he said.
Total consolidated passenger revenue during the fourth quarter increased 1.3 percent year over year to $8.1 billion, and ancillary revenue per passenger was up 9.7 percent. Yield also increased 1.3 percent.
Consolidated capacity increased 0.9 percent year over year during the quarter while demand increased 0.1 percent, leading to a 0.7 percentage-point drop in load factor to 81.7 percent.
United's net income for the quarter was $28 million, down from $140 million in the fourth quarter of 2013. The fourth quarter included $433 million in such special-item costs as severance for more than 2,500 flight attendants who opted for an early-out program, fuel-hedging costs and debt costs. For the full year, United's net income nearly doubled year over year to $1.13 billion.