United Airlines Q3 Profit Up 58 Percent

October 22, 2015

United Airlines reported adjusted profit of USD$1.7 billion for the third quarter, up 58 percent from a year earlier thanks to lower fuel costs.

Third quarter revenue was USD$10.3 billion, a decrease of 2.4 percent year-over-year.

United forecast unit revenue will decline by between 4 and 6 percent in the fourth quarter. Delta Air Lines expects a drop in the same measure between 2.5 and 4.5 percent.

A strong US dollar has dented sales to foreign visitors, and the falling price of oil has reduced revenue from energy clients by 35 percent for United.

United said capacity will rise between 1.5 and 2.5 percent in 2016, more than 2015's expansion. This includes a new route to China, where United sees demand and competition growing.

CONCERNS

United tried to dismiss concerns that executive shake-ups have left an amateur team running its business, promising better service and moderate expansion in 2016 for investors worried about weak demand.

The forecast follows two rocky months at United. Its chief executive of five years Jeff Smisek resigned in September after an investigation into the airline's relationship with the Port Authority of New York and New Jersey.

A week ago, his successor Oscar Munoz suffered a heart attack and it remains unclear if Munoz will return.

United's general counsel Brett Hart now serves as acting CEO.

"At its core, this is a team that has been here through the first quarter, which resulted in record results; the second quarter, which resulted in record results; and the third quarter which resulted in record results," Hart said.

Hart said his agenda does not differ "at all" from the one set by Munoz, who met workers to rebuild morale after years of strained relations.

He said United will announce changes in upcoming weeks to service on board the airline.

(Reuters)