The parent company of United Airlines, UAL, reported Monday net income of $23 billion, but explained that the apparent profit was mostly non-cash reorganization gains from the discharge of liabilities as it exited Chapter 11. The company said it felt the $306 million loss, arrived at by not counting reorganization items, is a truer picture of how United is currently flying. The loss a year earlier was $302 million.The airline, which flies more seats to Hawaii than any other carrier, generated positive operating cash flow of more than $400 million. It reported an operating loss of $171 million, down $79 million from a year ago despite 33 percent higher fuel bills adding $314 million to expenses. "We will drive continued margin improvement and unlock the full value of our assets," CEO Glenn Tilton said.
Total revenue increased 14 percent, year to year, to $4.47 billion. Mainline revenue per available seat mile rose 11 percent. "The improved revenue environment essentially compensated for record high fuel expense," said Chief Financial Officer Jake Brace.
The company said one way it controlled costs was to close remote terminals at Los Angeles, San Francisco, and Washington Dulles, eliminating the need to bus passengers between terminals.
It said employee productivity (available seat miles divided by employee equivalents) was up 6 percent.
The company expects mainline fuel price to average $2.15 per gallon for the second quarter and $2.06 per gallon for the full year (including taxes). The company currently has no fuel hedges in place for the remainder of 2006.
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