United Airlines Reports Second-Quarter 2017 Performance

CHICAGO, July 18, 2017 /PRNewswire/ -- United Airlines (UAL) today announced its second-quarter 2017 financial results. Oscar Munoz, chief executive officer of United Airlines, said, "The positive financial and operational performance this past quarter demonstrates that United is firmly on the right path. From investing in our products and our people, redoubling our focus on the customer experience, closing the margin gap with our peers and delivering strong returns to our investors, we have made important progress and moved United decisively forward. No single quarter constitutes a trend and we still have much further to go before we fully realize the potential of this airline and exceed the expectations of our customers. But, we also know that one success begets another and the strong financial and operating performance we posted this quarter adds to the momentum that all of us here at United are determined to build upon."


For the second quarter of 2017, revenue was $10.0 billion, an increase of $604 million or 6.4 percent year-over-year. Second-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was up 2.1 percent and consolidated yield increased 2.0 percent compared to the second quarter of 2016. Cargo revenue was $254 million in the second quarter of 2017, an increase of 22.1 percent year-over-year due primarily to higher volumes across the system.

Scott Kirby, president of United Airlines, said, "Second quarter performance was outstanding both financially and operationally. We are incredibly proud that the United team delivered the best operational performance among major competitors during one of our busiest quarters. This impressive quarterly performance was a strong finish to the first half of the year."


Operating expense was $8.6 billion in the second quarter, up 3.2 percent year-over-year. Excluding special charges, operating expense was $8.6 billion, an 8.3 percent increase year-over-year. Consolidated unit cost per available seat mile (CASM) decreased 1.0 percent compared to the second quarter of 2016 due largely to lower special charges in 2017, partially offset by higher labor and fuel expense. Second-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 3.1 percent year-over-year, driven mainly by higher labor expense.


UAL generated $1.6 billion in operating cash flow and ended the quarter with $6.6 billion in unrestricted liquidity, including $2.0 billion of undrawn commitments under its revolving credit facility. The company's capital expenditures were $1.1 billion in the second quarter. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $1.2 billion during the second quarter in adjusted capital expenditures. Free cash flow, measured as operating cash flow less adjusted capital expenditures, was $314 million for the second quarter. The company contributed $160 million to its pension plans and made debt and capital lease principal payments of $238 million in the second quarter. In the quarter, UAL purchased $0.4 billion of its common shares at an average price of $74.39 per share. As of June 30, 2017, the company had approximately $1.1 billion remaining to purchase shares under its existing share repurchase authority.

For the 12 months ended June 30, 2017, the company's pre-tax income was $3.8 billion and return on invested capital (ROIC) was 17.0 percent.

Andrew Levy, executive vice president and chief financial officer of United Airlines, said, "We are delivering on our commitments to our shareholders. Our margin performance and growth in earnings per share in the quarter demonstrate we are moving in the right direction. We expect our pre-tax margin in the third quarter to be between 12.5 and 14.5 percent."


In the second quarter, UAL took delivery of six Boeing 777-300ER aircraft, one used Airbus A319 aircraft and ten Embraer E175 aircraft. UAL announced it will take delivery of four additional Boeing 777-300ER aircraft in 2018. The 777-300ER aircraft feature the company's all-new United Polaris business class, with custom-designed, exclusive-to-United seats and new amenity kits. In addition, the company purchased four Airbus A320 aircraft and three Boeing 757-200 aircraft that it currently operates off lease in the second quarter. With regards to future deliveries, UAL deferred four Airbus A350 aircraft out of 2018 and accelerated 12 Boeing 737 MAX aircraft into 2019 and two 787-10 aircraft within 2019. The company also converted 100 of its current Boeing 737 MAX aircraft orders into Boeing 737 MAX 10 aircraft and expects to take delivery of the aircraft starting in late 2020.

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

• Implemented the majority of the ten changes announced at the end of April to improve overall customer experience including: • Upgraded all flights between Boston and San Francisco to offer its premium transcontinental business class service, including flat-bed seats and enhanced food. Additionally, upgraded amenities on its premium transcontinental business class service between Newark/New York and San Francisco and Newark/New York and Los Angeles, including new menu offerings and custom bedding from Saks Fifth Avenue.
• Announced the addition of complimentary hot meals and alcoholic beverages for customers traveling in Economy Plus on all premium transcontinental flights.
• Opened a new Global Reception lobby at Los Angeles International Airport (LAX) as part of the company's more than half a billion dollar renovation effort to reimagine all customer-facing spaces at LAX.
• During the second quarter, United made enhancements to improve customers' ability to redeem MileagePlus miles. • The company announced several route and service enhancements including: •Announced improvements to the customer experience at Houston George Bush Intercontinental Airport by offering customers shorter, more convenient connection times and better access to more destinations through "rebanking" of the hub starting in October.

• Employees delivered best completion, on-time departure and arrival performance in company history; as a result, United had fewer cancellations than any major competitor.
• Expanded responsibilities for several executive leaders to better serve customers, lead employees and focus on becoming the world's leading airline.
• Employees earned $28 million in bonuses for operational performance.

United Airlines to Hold Live Webcast of Second-Quarter 2017 Financial Results

July 07, 2017

CHICAGO, July 7, 2017 /PRNewswire/ -- United Airlines will hold a conference call to discuss second-quarter 2017 financial results on Wednesday, July 19, 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 second-quarter financial results and third-quarter 2017 investor update after market close on Tuesday, July 18.

The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.

United Airlines (UAL) today announced its second-quarter 2017 financial results.

UAL reported second-quarter net income of $818 million, diluted earnings per share of $2.66, pre-tax earnings of $1.3 billion and pre-tax margin of 12.7 percent.
Excluding special charges, UAL reported second-quarter net income of $846 million, diluted earnings per share of $2.75, pre-tax earnings of $1.3 billion and pre-tax margin of 13.2 percent.
Second-quarter diluted earnings per share increased nearly 50 percent year-over-year; excluding special charges, second-quarter diluted earnings per share increased over 5 percent year-over-year.
Delivered the top airline operation among major competitors, including the best completion, on-time arrival and departure performance in the second quarter.

Oscar Munoz, chief executive officer of United Airlines, said, "The positive financial and operational performance this past quarter demonstrates that United is firmly on the right path. From investing in our products and our people, redoubling our focus on the customer experience, closing the margin gap with our peers and delivering strong returns to our investors, we have made important progress and moved United decisively forward. No single quarter constitutes a trend and we still have much further to go before we fully realize the potential of this airline and exceed the expectations of our customers. But, we also know that one success begets another and the strong financial and operating performance we posted this quarter adds to the momentum that all of us here at United are determined to build upon."

During the second quarter, United made enhancements to improve customers' ability to redeem MileagePlus miles

Last week, severe weather in Atlanta caused significant disruptions to Delta’s operations. The company cancelled approximately 4,000 flights as a result of the weather and the subsequent operational recovery. The company returned to normal operations on Sunday afternoon and had a 100% mainline completion factor yesterday. Delta currently estimates the storm will reduce its June quarter pre-tax income by $125 million.

Excluding special items, UAL reported second-quarter net income of $863 million, earnings per share of $2.61 per diluted share and pre-tax earnings of $1.4 billion.