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United Looks Past Integration Woes

CHICAGO ( TheStreet) -- United Continental (UAL - Get Report) reported a first-quarter loss due to merger integration costs, but beat estimates and said it is now "on the steep back slope" of its integration.

The carrier reported a net loss of $286 million, or 87 cents a share. Analysts surveyed by Thomson Reuters had expected a loss of 96 cents. Revenue rose 4.9% to $8.6 billion, in line with estimates.

Including items, primarily special charges related to merger integration costs, United reported a net loss of $448 million, or $1.36 a share.

"This was a difficult quarter, but we made significant progress with our integration and we're now able to serve our customers as a single airline," said Jeff Smisek, UAL's president and CEO. "We are now on the steep back slope of our integration and can look forward to delivering more benefits from the merger in the remainder of the year."

During the quarter, passenger revenue per available seat mile rose 5.2%. Domestic PRASM rose 4.5%, international PRASM rose 3.8% and Pacific PRASM fell by 0.2%. On the cost side, fuel costs rose by $557 million from the same period a year earlier. Cost per available seat mile, excluding fuel and special charges, rose 0.6%.

On March 3, United converted to a single passenger service system, the largest technology conversion in aviation history, and also moved to a single Web site and a single loyalty program following the 2010 merger with Continental. The conversion required 1.7 million hours of training, the company said, and involved upgrading more than 12,000 workstations and migrating more than 17 million passenger records and 32 million frequent flier accounts.

"Our revenue results were negatively impacted by the integration of our revenue management and booking systems, which included reducing our booking levels so we could better serve our customers during the reservations conversion," said Jim Compton, executive vice president and chief revenue officer. "We look forward to leveraging our new systems and world-class network to improve revenue results for the remainder of the year."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

>To follow the writer on Twitter, go to

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