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United Continental Holdings

(UAL) - Get United Airlines Holdings, Inc. Report

reported dramatic year-over-year profit gains at both operating units of the newly combined carrier.

Both reported strong unit revenue gains in the Pacific. Combined revenue was $9.4 billion. However, the carriers, which combined Oct. 1, reported third-quarter results separately.

For the former United, net income excluding items was $473 million or $2.12 a share. Analysts surveyed by Thomson Reuters had estimated $2.15 a share. Revenue rose 21.7% to $5.4 billion, in line with estimates.

Including items, United earned $387 million. In the same period a year earlier, including items, United lost $57 million, equivalent to a loss of 39 cents a share.

"We achieved strong third quarter financial and operational results at both United and Continental," said CEO Jeff Smisek, in a prepared statement. "We have begun our merger integration, and we have a lot of work ahead of us." The company said results for the two carriers would be reported on a combined basis in the fourth quarter.

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During the quarter, United consolidated passenger revenue per available seat mile increased 18.3%, while capacity grew by 2.6%. Pacific RASM grew 41%, while domestic RASM grew 10.7% and total international RASM growth was 30.7%. On the cost side, consolidated cost per available seat mile excluding fuel and other items grew by 2.4%.

Separately, Continental reported third-quarter net income of $367 million, or $2.24 a share, an improvement of $365 million year over year. Revenue was $4 billion. Including items, Continental had third-quarter net income of $354 million, compared with a year ago gain of $2 million.

Continental's revenue rose 19.2% to $4 billion, while consolidated RASM grew 19.8%, led by a 33.4 % gain in the Pacific. Domestic RASM grew by 16.2% while international RASM grew 24.8% On the cost side excluding fuel and special items, consolidated CASM grew 2.7%.

The companies ended the third quarter with a combined $9.1 billion of unrestricted cash, cash equivalents and short-term investments.

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


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Ted Reed

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