UAL quarterly profit declines 37pc to US$6 million, revenue off 2.6pc

NEW YORK-listed United Continental Holdings (UAL) has posted a third-quarter year-on-year 37 per cent decline in net profit to US$6 million drawn on revenues of $9.9 billion, down 2.6 per cent

The result includes special charges of $514 million, which also contains a $454 million charge for lump sum cash payments to its pilots in future as well as other labour and pension related expenses.

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

Quarterly cargo revenue decreased 2.3 per cent or $27 million to $1.1 billion and passenger sales fell 2.6 per cent to $8.8 billion year on year.

Consolidated revenue passenger miles (RPMs) dropped 1.5 per cent on a consolidated capacity (available seat miles) decrease of 1.4 per cent for the third quarter, resulting in a third-quarter consolidated load factor of 85.2 per cent.

Said revenue vice president Jim Compton: "In September, we entered the next phase of aircraft redeployment, as we continue to match the right aircraft to the right routes. Early results of our redeployment efforts are promising, and we are eager to optimise our global network and realise the full revenue potential of our merger [of United Airlines and Continental Airlines]."

UAL took delivery of this first Boeing 787 during the quarter, which is the first of five new Dreamliners the airline scheduled to be delivered this year from its total order for 50 of the aircraft.

Besides, the company announced an order to purchase 150 narrowbody Boeing 737 aircraft, including 100 Boeing 737 MAX 9 aircraft and 50 Boeing 737-900ER aircraft for delivery between 2013 and 2022.

Merger troubles led Jim Corridore, an analyst at S&P Capital IQ, to downgrade United Continental shares to hold, from buy. "While we think long term the merger will bring great benefits, we have less confidence in management's ability to manage the integration in the near term," he wrote.