Productivity Trumps Fuel Costs at UAL

Updated from 9:34 a.m. EDT

UAL(UAUA Quote), the parent of United Airlines, posted third-quarter net income of $190 million, a result of higher ticket prices and a continued effort to boost productivity following its February emergence from bankruptcy protection.

The second-largest airline said net income equated to $1.30 a share on revenue of $5.2 billion, up 11%. Analysts surveyed by Thomson Financial had forecast earnings of $1.43 a share on revenue of $5.2 billion. On a conference call, CFO Jack Brace said the company would have earned $1.73 per share had it not allocated 43 cents to account for income tax expenses.

United said it showed a year-over-year $95 million improvement in net income after special items. It said that continued revenue and productivity enhancements more than offset a $293 million increase in the cost of fuel. Shares of United fell 83 cents, or 2.3%, to $35.94.

United has been widely criticized for not securing more cost improvements during its three-year stay in bankruptcy. But CEO Glenn Tilton said that following its emergence, the airline has been able to involve employees in cost-cutting through numerous initiatives that each produce their own savings.

"One of the things we get to do, post-exit [is] to involve all of our employees in activity that is much more relevant to them, in identifying and realizing cost-saving initiatives," he said. "If we can improve the customer experience, improve employee engagement, and simultaneously improve our costs, I think we're going to ring the potential out of this company that has always been here."