United Misses on Merger Woes, Unit Revenue Declines

CHICAGO (TheStreet) -- United (UAL) missed analysts' earnings estimates, as unit revenue fell in every region except the Pacific.

Excluding items, the world's largest airline said it earned $520 million, or $1.35 a share. Analysts surveyed by Thomson Reuters had estimated $1.47. Revenue fell 2.6% to $9.9 billion; analysts had estimated $10 billion.

Including $514 million in special items, principally a $454 million charge associated with future lump sum cash payments to its pilots and also other labor and pension related charges, United earned $6 million, or 2 cents a share.

During the quarter, consolidated passenger revenue per available seat mile decreased 1.3%. PRASM showed single-digit declines in every region except for the Pacific, where it increased by 9.9%. On the cost side, cost per available seat mile excluding fuel and special charges increased 2.5%. Capacity decreased 1.4%.

United was plagued during the quarter by operational shortcomings associated with completion of the merger with Continental.

"We overcame tough operational challenges and remain focused on running a reliable airline," said CEO Jeff Smisek, in a prepared statement.

But Jim Compton, executive vice president, seemed to promise future improvement, because United's merger integration problems have included having the wrong aircraft on some routes.

"In September, we entered the next phase of aircraft redeployment, as we continue to match the right aircraft to the right routes," Compton said. "Early results of our redeployment efforts are promising, and we are eager to optimize our global network and realize the full revenue potential of our merger."

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

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