CHICAGO, April 17, 2017 /PRNewswire/ -- United Airlines (UAL) today announced its first-quarter 2017 financial results.

•UAL reported first-quarter net income of $96 million, diluted earnings per share of $0.31, pre-tax earnings of $145 million and pre-tax margin of 1.7 percent.
•Excluding special items, UAL reported first-quarter net income of $129 million, diluted earnings per share of $0.41, pre-tax earnings of $196 million and pre-tax margin of 2.3 percent.

Oscar Munoz, chief executive officer of United Airlines, said, "In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building. It is obvious from recent experiences that we need to do a much better job serving our customers. The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the center of everything we do. We are dedicated to setting the standard for customer service among U.S. airlines, as we elevate the experience our customers have with us from booking to baggage claim."

First-Quarter Revenue

For the first quarter of 2017, revenue was $8.4 billion, an increase of 2.7 percent year-over-year. First-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was flat and consolidated yield increased 0.4 percent compared to the first quarter of 2016.

Scott Kirby, president of United Airlines, said, "United is delivering on the commitments we made at investor day last fall. We saw positive trends in the revenue environment in the quarter and are optimistic about the year ahead. Looking forward, we expect second-quarter consolidated PRASM to be up 1.0 to 3.0 percent. This would mark the fifth straight quarter of sequential improvement and the first quarter of positive unit revenue growth in two years."

First-Quarter Costs

Operating expense was $8.1 billion in the first quarter, up 7.9 percent year-over-year. Excluding special charges, operating expense was $8.1 billion, a 10.0 percent increase year-over-year. Consolidated unit cost per available seat mile (CASM) increased 5.1 percent compared to the first quarter of 2016 due largely to higher fuel expense and the impact of labor agreements ratified in 2016. First-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 5.0 percent year-over-year, driven mainly by higher labor expense.

Liquidity and Capital Allocation

In the first quarter of 2017, UAL increased its revolving credit facility by $650 million to a total capacity of $2.0 billion with the full amount currently undrawn and increased its existing term loan by approximately $440 million with more favorable terms and rates. Also in the first quarter, the company raised $300 million of unsecured debt at 5 percent.

UAL generated $547 million in operating cash flow and ended the quarter with $6.4 billion in unrestricted liquidity, including its $2.0 billion revolving credit facility. The company's capital expenditures were $691 million in the first quarter. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $1.4 billion during the first quarter in adjusted capital expenditures. The company contributed $80 million to its pension plans and made debt and capital lease principal payments of $346 million in the first quarter.

For the 12 months ended March 31, 2017, the company's pre-tax income was $3.5 billion and return on invested capital (ROIC) was 17.5 percent. In the quarter, UAL purchased $0.3 billion of its common shares at an average price of $68.41 per share. As of March 31, 2017, the company had approximately $1.5 billion remaining to purchase shares under its existing share repurchase authority.

Andrew Levy, executive vice president and chief financial officer of United Airlines, said, "During the quarter, we improved our liquidity and continued to return cash to shareholders. We remain focused on maintaining a strong balance sheet and finding incremental cost savings opportunities."

For more information on UAL's second-quarter 2017 guidance, please visit ir.united.com for the company's investor update.

First-Quarter Highlights

Customer Experience
•Modernized airport screening experience with fully redesigned security checkpoint at Newark Liberty International Airport.
•Debuted new Terminal C North at Houston's George Bush Intercontinental Airport – elevating the customer experience with roomier gate areas, the latest technology and chef-inspired dining choices.
•United named "Eco-Airline of the Year" from Air Transport World magazine for its leadership in environmental action.
•Launched United Jetstream, a new online portal for corporate and travel agency customers that simplifies the travel management process and gives customers an intuitive suite of self-service tools.
•Launched new Basic Economy fare for travel between Minneapolis/St. Paul and any of United's seven U.S. hubs.

Network and Fleet
•Began implementing plan to improve the company's route network with more destinations, more flights and more convenient connections, with expectations to add service to 31 destinations across the U.S. and Europe in 2017.
•Took delivery of six Boeing 777-300ER aircraft, two Boeing 787-9 aircraft and one used Airbus A319 aircraft in the quarter.
•Purchased 12 currently operated Boeing 737NG aircraft previously leased to the company.
•Entered into a new partnership with Air Wisconsin Airlines to operate 50 regional jets under the United Express brand.

Operations and Employees
•Achieved a record-setting 25 zero-cancellation days for the mainline operation in the quarter.
•Consolidated completion factor was 97.5 percent in the first quarter, 0.6 points higher than the 96.9 percent from first-quarter 2016. This represents over 2,500 fewer flight cancellations compared to the first quarter of 2016.
•Achieved best-ever consolidated on-time departure rate for both February and March and lowest-ever first-quarter mishandled bag rate in company history.
•Employees earned cash-incentive payments of approximately $18 million for achieving operational performance goals in the quarter.

United Airlines to Hold Live Webcast of First-Quarter 2017 Financial Results
CHICAGO, April 7, 2017 /PRNewswire/ -- United Airlines will hold a conference call to discuss first-quarter 2017 financial results on Tuesday, April 18, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its first-quarter financial results and second-quarter 2017 investor update after market close on Monday, April 17.
The webcast will be available for replay within 24 hours of the conference call and then archived on the website for a limited time.

Oscar Munoz, chief executive officer of United Airlines, said, "In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building. It is obvious from recent experiences that we need to do a much better job serving our customers. The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the center of everything we do. We are dedicated to setting the standard for customer service among U.S. airlines, as we elevate the experience our customers have with us from booking to baggage claim."