United Boosts Second Quarter Profit

United Airlines reported a second quarter net profit increase of 39 percent as mainline passenger revenue rose by 8 percent.

Operating revenue reached USD$10 billion in the quarter to end June, a 6.4 percent increase on the prior year quarter. Expenses were up 3.2 percent to $8.6 billion, resulting in a $1.4 billion operating profit. Net profit after tax came in at $818 million, from 2Q16’s $588 million.

United said it had introduced “the majority of the ten changes” it announced in reaction to the forced offloading of a passenger in April. The airline suffered a public relations disaster when security officers dragged David Dao off a flight to allow a flight attendant to have his seat. The airline eventually apologised but only after social media outrage forced its hand.

The changes implemented as a result of the incident include increased compensation for denied boarding, reduced overbooking, and the introduction of a “no questions asked” policy on lost bags.

As a result of the changes to its overbooking policy, United saw a 79 percent reduction in involuntary denied boardings in May, and an 88 percent drop in June on the previous year.

United’s chief executive Oscar Munoz said “The positive financial and operational performance this past quarter demonstrates that United is firmly on the right path… we have made important progress and moved United decisively forward.”

The Chicago-based airline saw operating expenses rise in the quarter, with staff costs up 10.6 percent to $2.87 billion and fuel jumping 16.1 percent to $1.67 billion. The average price paid for a gallon of aviation fuel was $1.63, up 13.2 percent on 2016.

Operationally, United carried 38.2 million passengers in the quarter, 5 percent up on 2Q16. RPM passenger traffic rose 4.3 percent on an ASM capacity increase of 4.2 percent. Resulting load factor was steady at 83.5 percent.

Consolidated passenger unit revenue (PRASM) was 2.1 percent higher, but CASM unit costs rose by 3.1 percent.

United received 17 aircraft during the period including ten Embraer E175s for its regional flying. It also announced changes to its delivery schedule, with 12 Boeing 737 MAX and two 787-10s moved forward, and four Airbus A350s to be delivered later.