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Slot loss, tax bill cut UAL profit to US$588 million, sales off 5.2pc

CHICAGO's United Continental Holdings reported a second quarter net profit of US$588 million - down from the $1.19 billion the year before - drawn on revenues of $9.4 billion, down a 5.2 per cent year on year.

For the current third quarter, United said its unit revenue is expected to be down between 5.5 per cent and 7.5 per cent. And its pretax margin should hit 13.5 per cent to 15.5 per cent, as opposed to 14.5 per cent in the second quarter.

The third quarter is generally the busiest in the calendar year for the industry, notes the Wall Street Journal.

Excluding items, a big write-down of its slot portfolio at Newark airport and a big tax bill, the carrier earned $1.3 billion. Its year earlier revenue was down four per cent year on year and its unit revenue fell 5.6 per cent.

Last Thursday, United disclosed that it will pay $2.25 million to the federal government in a nonprosecution agreement related to a single felony bribery plea made by the former chairman of the Port Authority of New York and New Jersey, which runs Newark and the other major New York area airports.

David Samson, a longtime New Jersey public official, was investigated for nearly three years by federal prosecutors for allegedly trading official actions for the resumption of a direct flight by United between Newark, a major United hub, and an airport near his vacation home in South Carolina.

The flight was stopped shortly after he stepped down as Port Authority chairman. An internal investigation done by United after subpoenas starting arriving in early 2015 led in September 2015 to the departure of then-United chief executive Jeff Smisek and two senior executives, who weren't charged.

The Securities and Exchange Commission also is investigating potential wrongdoing related to United, the Port Authority and Newark. On Tuesday, the company's general counsel said United is "in discussions with the SEC," and declined further comment.