United Announces Highest-Ever Quarterly Profit - United Hub

United Announces Highest-Ever Quarterly Profit

UAL Reports $1.3 Billion Second-Quarter 2015 Profit Excluding Special Items;
July 23, 2015

CHICAGO, July 23, 2015 /PRNewswire/ -- United Airlines (UAL) today reported second-quarter 2015 net income of $1.3 billion, or $3.31 per diluted share, excluding $67 million of special items. Including special items, UAL reported second-quarter net income of $1.2 billion, or $3.14 per diluted share. These results are a record quarterly profit for the company.

  • The company's Board of Directors authorized an additional $3 billion share repurchase program, which the company expects to complete by the end of 2017.
  • In the quarter, UAL prepaid approximately $800 million of debt, contributed approximately $620 million to its pension plans and returned approximately $250 million to shareholders as part of its existing $1 billion share buyback program.
  • UAL earned an 18.2 percent return on invested capital for the 12 months ended June 30, 2015.

"This quarter's record results reflect the progress we're making on our long-term plan, and I'd like to thank the United team for their great work," said Jeff Smisek, UAL's chairman, president and chief executive officer. "The $3 billion share repurchase program we announced today demonstrates the confidence we have in our future. We will continue to invest in our customers, assets and our people, and remain committed to improving our balance sheet, expanding our margins and improving our return on invested capital, and expect our third quarter pre-tax margin to be between 13.5 and 15.5 percent, excluding special items."

Second-Quarter Revenue and Capacity

For the second quarter of 2015, total revenue was $9.9 billion, a decrease of 4 percent year-over-year. Second-quarter consolidated passenger revenue decreased 3.4 percent to $8.7 billion, compared to the same period in 2014. Ancillary revenue per passenger in the second quarter increased 6.7 percent year-over-year. Second-quarter cargo revenue decreased 1.3 percent year-over-year to $229 million. Other revenue in the second quarter decreased 9.6 percent year-over-year, mostly due to the reduction in sales of fuel to a third party. The corresponding expense decline from this reduction appears in third-party business expense.

Consolidated revenue passenger miles increased 0.7 percent and consolidated available seat miles increased 2.3 percent year-over-year for the second quarter, resulting in a second-quarter consolidated load factor of 83.9 percent.

Second-quarter 2015 consolidated PRASM decreased 5.6 percent and consolidated yield decreased 4.1 percent compared to the second quarter of 2014.

"This quarter, we continued to build and refine our route network, including announcing the move of p.s. transcontinental service to our global gateway hub at Newark Liberty Airport and forming a long-term partnership with Azul Brazilian Airlines. These decisions will enhance our network and provide our customers with more choice and convenience," said Jim Compton, UAL's vice chairman and chief revenue officer. "We will continue to improve our leading network by focusing on our strengths, while investing in our people, fleet and products to increase revenue and deliver a flyer-friendly customer experience."

Passenger revenue for the second quarter of 2015 and period-to-period comparisons of related statistics for UAL's mainline and regional operations are as follows:

Second-Quarter Costs

Second-quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, increased 0.3 percent compared to the second quarter of 2014, primarily due to the company's Project Quality efficiency and quality initiative. Second-quarter consolidated CASM including those items decreased 12.2 percent, largely due to reduced fuel costs.

Second-quarter total operating expenses, excluding special charges, decreased $840 million, or 9.1 percent, year-over-year. Including special charges, total operating expenses decreased $954 million, or 10.1 percent, in the second quarter versus the same period in 2014.

Liquidity and Cash Flow

In the second quarter, UAL generated $1.8 billion in operating cash flow, $474 million in free cash flow, and ended the quarter with $6.3 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. During the second quarter, the company had gross capital expenditures of approximately $1.26 billion, excluding fully reimbursable projects. The company contributed approximately $620 million to its pension plans and made debt and capital lease principal payments of approximately $1 billion in the second quarter, including approximately $800 million of debt prepayments.

In the second quarter, the company invested $100 million, through a wholly owned subsidiary, to acquire an approximate 5 percent stake in Azul Brazilian Airlines, and invested $30 million to acquire an equity stake in Fulcrum BioEnergy, an alternative fuels company. 

For the 12 months ended June 30, 2015, the company's return on invested capital was 18.2 percent.

As part of UAL's $1 billion share buyback program, the company spent approximately $250 million in share repurchases in the second quarter. Through the second quarter, UAL has returned a total of approximately $770 million to shareholders under the program, and expects to complete the program in the third quarter of this year.

UAL's Board of Directors authorized an additional $3 billion share repurchase program which the company expects to complete by 2017. This amount represents approximately 14 percent of the company's market capitalization as of the closing stock price on July 22, 2015.

"Our record profit in the quarter is the result of the great work of all of our employees, as demonstrated by our seventh consecutive quarter of good cost performance," said John Rainey, UAL's executive vice president and chief financial officer. "We are pleased to announce an additional $3 billion share repurchase program which supports our goals of returning cash to shareholders while investing in our business and improving our capital structure."

UAL may repurchase shares through the open market, privately negotiated transactions, block trades, or accelerated share repurchase transactions from time to time in accordance with applicable securities laws. UAL will repurchase shares of common stock subject to prevailing market conditions and may discontinue such repurchases at any time. 

For more information on UAL's third-quarter 2015 guidance, please visit ir.united.com for the company's investor update.

About United

United Airlines and United Express operate an average of nearly 5,000 flights a day to 362 airports across six continents. In 2014, United and United Express operated nearly two million flights carrying 138 million customers. United is proud to have the world's most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates nearly 700 mainline aircraft, and this year, the airline anticipates taking delivery of 34 new Boeing aircraft, including the 787-9 and the 737-900ER. United is also welcoming 49 new Embraer E175 aircraft to United Express. The airline is a founding member of Star Alliance, which provides service to 192 countries via 28 member airlines. More than 84,000 United employees reside in every U.S. state and in countries around the world. For more information, visit united.com, follow @United on Twitter or connect on Facebook. The common stock of United's parent, United Continental Holdings, Inc., is traded on the NYSE under the symbol UAL.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as "expects," "will," "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook" and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, cost reduction initiatives and fleet replacement programs; our ability to utilize our net operating losses; our ability to attract and retain customers; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); our ability to cost-effectively hedge against increases in the price of aircraft fuel; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including open skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; labor costs; our ability to maintain satisfactory labor relations and the results of the collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Item 1A., Risk Factors, of UAL's Annual Report on Form 10-K, as well as other risks and uncertainties set forth from time to time in the reports we file with the SEC.

-tables attached-

 

 

 

 

2015 - Special items

 

Severance and benefits: During the three and six months ended June 30, 2015, the company recorded $25 million and $75 million, respectively, of severance and benefits primarily related to a voluntary early-out program for its flight attendants. In 2014, more than 2,500 flight attendants elected to voluntarily separate from the company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through the end of 2015. The company will record approximately $25 million of additional expense through the remainder of 2015 associated with this program over the remaining required service periods.

   
 

Integration-related costs: Integration-related costs include compensation costs related primarily to systems integration and training for employees.

 

 

(Gains) losses on sale of assets and other special charges: During the three and six months ended June 30, 2015, the company recorded $16 million and $12 million, respectively, for the impairment of assets and other special gains and losses.

   
 

Loss on extinguishment of debt and other, net: During the three and six months ended June 30, 2015, the company recorded $128 million and $134 million, respectively, of losses as part of Nonoperating income (expense): Miscellaneous, net due to the write-off of the unamortized non-cash debt discount related to the extinguishment of the 6% Notes due 2026 and 6% Notes due 2028.

   
 

MTM gains from fuel derivative contracts settling in future periods and prior period losses on fuel derivative contracts settled in the current period: The company uses certain combinations of derivative contracts that are economic hedges but do not qualify for hedge accounting under U.S. generally accepted accounting principles. Additionally, the company may enter into contracts at different times and later combine those contracts into structures designated for hedge accounting. As with derivatives that qualify for hedge accounting, the economic hedges and individual contracts are part of the company's program to mitigate the adverse financial impact of potential increases in the price of fuel. The company records changes in the fair value of these various contracts that are not designated for hedge accounting to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations. During the three and six months ended June 30, 2015, the company recorded $26 million and $7 million, respectively, in MTM gains on fuel derivative contracts that will settle in future periods. For fuel derivative contracts that settled in the three and six months ended June 30, 2015, the company recorded MTM losses of $90 million and $105 million, respectively, in prior periods. The figures above also include an insignificant amount of ineffectiveness on hedges that are designated for hedge accounting.

   
 

2014 - Special items

 

Severance and benefits: During the three and six months ended June 30, 2014, the company recorded $38 million and $52 million, respectively, of severance and benefits primarily related to reductions of management and front-line employees, including from Hopkins International Airport (Cleveland), as part of its cost savings initiatives. The company reduced its average daily departures from Cleveland by over 60 percent during the second quarter of 2014. The company is currently evaluating its options regarding its long-term contractual commitments at Cleveland. The capacity reductions at Cleveland may result in further special charges, which could be significant, related to our contractual commitments.

   
 

Integration-related costs: Integration-related costs included compensation costs related to systems integration and training and relocation for employees.

   
 

Costs associated with permanently grounding Embraer ERJ 135 aircraft: During the three months ended June 30, 2014, the company recorded $66 million for the permanent grounding of 21 of the company's Embraer ERJ 135 regional aircraft under lease through 2018, which included an accrual for remaining lease payments and an amount for maintenance return conditions. The company decided to permanently ground these 21 Embraer ERJ 135 aircraft as a result of new Embraer E175 regional jet deliveries, the impact of pilot shortages at regional carriers and fuel prices.

   
 

Losses on sale of assets and other special charges: During the six months ended June 30, 2014, the company recorded $33 million for charges related primarily to the impairment of its flight equipment held for disposal associated with its Boeing 737-300 and Boeing 737-500 fleets and incurred losses on sales of aircraft and other assets and other special losses totaling $19 million.

   
 

Venezuela local currency loss: The company recorded $21 million of losses due to exchange rate changes in Venezuela applicable to funds held in local currency.

   
 

MTM gains from fuel derivative contracts settling in future periods and prior period gains on fuel derivative contracts settled in the current period: The company utilizes certain derivative instruments that are economic hedges but do not qualify for hedge accounting under U.S. generally accepted accounting principles. The company records changes in the fair value of these economic hedges to Nonoperating income (expense): Miscellaneous, net in the statements of consolidated operations. During the three and six months ended June 30, 2014, the company recorded $46 million and $33 million, respectively, in MTM gains on economic hedges that will settle in future periods. For economic hedges that settled in the three and six months ended June 30, 2014, the company recorded MTM gains of $7 million and $42 million, respectively, in prior periods. The figures above also include an insignificant amount of ineffectiveness on hedges that are designated for hedge accounting.

     

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No federal income tax expense was recognized related to the company's pretax income for the three and six months ended June 30, 2015, and 2014 due to the utilization of book net operating loss carry forwards for which no benefit has previously been recognized. The company is required to provide a valuation allowance for its deferred tax assets in excess of deferred tax liabilities because UAL concluded that it is more likely than not that such deferred tax assets will ultimately not be realized.

 

 

 

 

 

 

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SOURCE United Airlines

For further information: United Airlines Worldwide Media Relations, +1-872-825-8640, media.relations@united.com

United Awards Free Flights for a Year to Winners of "Your Shot to Fly" Sweepstakes

Grand prize winners live in Bradenton, FL; Cleveland, OH; Goodyear, AZ; Oakland, CA and San Francisco, CA
July 29, 2021

CHICAGO, July 29, 2021 /PRNewswire/ -- United Airlines today announced the five lucky grand prize winners of its "Your Shot to Fly" sweepstakes, who will each get to fly anywhere in the world United flies with a companion over the course of the next year. The winners of the "Your Shot to Fly" sweepstakes are:

  • Ashley Cronkhite from Bradenton, FL
  • Robert Simicak from Cleveland, OH
  • Sean Husmoe from Goodyear, AZ
  • Lauren Aldredge from Oakland CA
  • Lauren M. from San Francisco, CA

The sweepstakes was in support of the Biden administration's ongoing national effort to encourage more people to get their COVID-19 vaccination and encouraged United's MileagePlus® loyalty members to upload their vaccine records to United. In less than a month, more than one million MileagePlus members uploaded their vaccine cards to the United app and website for a shot to win one of the grand prizes. In June the airline awarded 30 first prize winners with a pair of roundtrip tickets anywhere United flies.

United First U.S. Airline to Offer Economy Customers Option to Pre-Order Snacks and Beverages

New pre-order option builds on the airline's contactless payment technology and is another example of the customer experience transformation underway at United
July 28, 2021

CHICAGO, July 28, 2021 /PRNewswire/ -- Starting today on select flights, all United customers – no matter what cabin of service they're flying in – can use the airline's award-winning mobile app and website to pre-order meals, snacks and beverages up to five days before they're scheduled to travel. United is the first and only U.S. airline to offer economy customers the option to pre-order snacks and beverages, a reflection of the customer experience transformation underway at the airline.



United Airlines to Operate More than 40 Weekly Flights as England Re-Opens to U.S. Travelers

In August, United is adding a second daily flight from Washington, D.C. to London
July 28, 2021

CHICAGO, July 28, 2021 /PRNewswire/ -- With today's announcement of England reopening to fully vaccinated travelers from the U.S. beginning Aug 2, United Airlines is making it easier for business and leisure customers to jet across the pond with the addition of flights to London. In August, United will have six daily flights between the U.S. and London, including a second daily flight from Washington, D.C. and increasing service from Houston to daily. United looks forward to resuming additional London service in the coming months as well as launching new nonstop service between Boston and London. Customers traveling to England must be fully vaccinated in the U.S. with vaccines that have been approved by the FDA and must take a test before departure as well as a PCR test within the first two days of arrival. Passengers vaccinated in the U.S. will also need to complete a passenger locator form prior to traveling to England and provide proof of U.S. residency.

United Releases Second-Quarter Financial Results; Expects Profitability* in the Third Quarter and Beyond

Airline projects positive adjusted pre-tax income(1) in second half of 2021
July 20, 2021

CHICAGO, July 20, 2021 /PRNewswire/ -- United Airlines (UAL) today announced second-quarter 2021 financial results. The company now expects positive adjusted pre-tax income¹ in the third and fourth quarters of 2021 as travel demand rebounds.

The company's second quarter performance largely exceeded original expectations as international long haul and business travel accelerated even faster than anticipated, together with continued yield improvement. Looking ahead, the company expects continued gains as more businesses return by end of summer and into 2022, with a full recovery in demand anticipated by 2023.

Electric Aircraft Set to Take Flight by 2026 Under New Agreements with United Airlines Ventures, Breakthrough Energy Ventures, Mesa Airlines, Heart Aerospace

United Airlines signs agreement to acquire 100 of Heart Aerospace's ES-19 aircraft, a 19-seat electric airliner that has the potential to decarbonize regional air travel
July 13, 2021

CHICAGO, July 13, 2021 /PRNewswire/ -- United Airlines Ventures (UAV) announced today it, along with Breakthrough Energy Ventures (BEV) and Mesa Airlines, has invested in electric aircraft startup Heart Aerospace. Heart Aerospace is developing the ES-19, a 19-seat electric aircraft that has the potential to fly customers up to 250 miles before the end of this decade. In addition to UAV's investment, United Airlines has conditionally agreed to purchase 100 ES-19 aircraft, once the aircraft meet United's safety, business and operating requirements. Mesa Airlines, United's key strategic partner in bringing electric aircraft into commercial service, has also agreed to add 100 ES-19 aircraft to its fleet, subject to similar requirements.

United Adds Nearly 150 Flights to Warm-Weather Cities This Winter

United adds service to cities in Mexico, Caribbean and Central America plus warm U.S. destinations in Arizona, California, Florida, Georgia and Nevada;
July 09, 2021

CHICAGO, July 9, 2021 /PRNewswire/ -- As demand for travel continues to build, United Airlines is expecting the resurgence to continue for winter holiday travel and is planning ahead by increasing service to cities in the U.S., Mexico, the Caribbean and Central America. The airline will add nearly 150 flights to warm-weather destinations across the U.S and is increasing service to Latin beach and leisure markets by 30% compared to 2019. The airline will fly 137 more flights than it did in 2019 to places like Florida, California, Arizona, Georgia and Nevada starting this November through next March.

United to Hold Webcast of Second-Quarter 2021 Financial Results

July 07, 2021

CHICAGO, July 7, 2021 /PRNewswire/ -- United Airlines will hold a conference call to discuss second-quarter 2021 financial results on Wednesday, July 21 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 after market close on Tuesday, July 20.

United Unveils Campaign Featuring Team USA Olympic and Paralympic Athletes

"Time to Let Yourself Fly" campaign stars athletes Simone Biles, Kolohe Andino, Julie Ertz, Jessica Long and Oz Sanchez
July 07, 2021

CHICAGO, July 7, 2021 /PRNewswire/ -- Today, United, the official airline sponsor of Team USA, debuted its new advertising campaign featuring five of the world's most accomplished and decorated Olympic and Paralympic athletes. Driven by the tagline "Time to Let Yourself Fly," the campaign highlights Team USA's return to the Games and honors the feeling many Americans have as they consider returning to travel. Customers traveling with United this summer will experience touches of the Team USA collaboration through signage displayed throughout United terminals and limited-edition amenity kits and pajamas available on select flights.

United Adds 270 Boeing and Airbus Aircraft to Fleet, Largest Order in Airline's History and Biggest by a Single Carrier in a Decade

"United Next" includes addition of 200 Boeing 737 MAX and 70 Airbus A321neo as well as plans to retrofit 100% of remaining mainline, narrow-body fleet to transform the customer experience and create a new signature interior - a roughly 75% increase in premium seats per North American departure, larger overhead bins, seatback entertainment in every seat and industry's fastest available WiFi;
June 29, 2021

CHICAGO, June 29, 2021 /PRNewswire/ -- United Airlines today announced the purchase of 270 new Boeing and Airbus aircraft - the largest combined order in the airline's history and the biggest by an individual carrier in the last decade. The 'United Next' plan will have a transformational effect on the customer experience and is expected to increase the total number of available seats per domestic departure by almost 30%, significantly lower carbon emissions per seat and create tens of thousands of quality, unionized jobs by 2026, all efforts that will have a positive, ripple effect across the broader U.S. economy.

United Airlines to Host 'United Next' Investor Event to Discuss Company Strategy

June 22, 2021

CHICAGO, June 22, 2021 /PRNewswire/ -- United Airlines will hold an investor event to provide an update on the Company's strategy. The event will take place on Tuesday, June 29 at 8:00 a.m. EDT and a live, listen-only webcast of the presentation will be available at ir.united.com.

United Advances Innovation Through Corporate Venture Capital Fund

United Airlines Ventures will invest in high-potential companies focused on sustainability, aerospace, and other innovative technologies
June 10, 2021

CHICAGO, June 10, 2021 /PRNewswire/ -- United Airlines launched a new, corporate venture fund today – United Airlines Ventures – that will allow the airline to continue investing in emerging companies that have the potential to influence the future of travel. The new fund will concentrate on sustainability concepts that will complement United's goal of net zero emissions by 2050 - without relying on traditional carbon offsets - as well as revolutionary aerospace developments and innovative technologies that are expected to create value for customers and United's operation.