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United Airlines Announces Highest Ever Quarterly Profit Of $1.1 Billion

October 27, 2014 - United Airlines (UAL) reported its third quarter profit for 2014, it is the companies highest-ever reported. The company reports its net income for this period was $1.1 billion an increase of 99 percent year-over-year.

United's consolidated passenger revenue per available seat mile (PRASM) increased 3.9 percent compared to the third quarter of 2013, it earned a 12.3 percent return on invested capital, returned $220 million to shareholders as part of its previously announced $1 billion share buyback program and ended the third quarter with $6.9 billion in unrestricted liquidity.

UAL's chairman, president and chief executive officer, Jeff Smisek said "Our third-quarter results demonstrate continued progress, and I want to thank our employees for their contributions to our success. We still have significant opportunity ahead to grow our margins and improve the quality and efficiency of everything we do."


For the third quarter of 2014, total revenue was $10.6 billion, an increase of 3.3 percent year-over-year. Third-quarter consolidated passenger revenue increased 4.4 percent to $9.3 billion, compared to the same period in 2013. Ancillary revenue per passenger in the third quarter increased 10.9 percent year-over-year to more than $22 per passenger.

Third-quarter cargo revenue grew 19.1 percent to $237 million driven by higher volumes year-over-year, as cargo traffic returned following lower bookings during the implementation of the company's new cargo systems in the third quarter of 2013. Other revenue decreased 8.9 percent year-over-year to $1.0 billion mostly due to the company choosing to discontinue an agreement to sell fuel to a third party. The corresponding expense decline appears in third-party business expense.

Consolidated revenue passenger miles increased 0.4 percent and consolidated available seat miles increased 0.5 percent year-over-year for the third quarter, resulting in a third-quarter consolidated load factor of 85.8 percent. Third-quarter 2014 consolidated PRASM increased 3.9 percent and consolidated yield increased 4.1 percent compared to the third quarter of 2013.



"We are seeing good results from our revenue initiatives, and over the next several quarters, we expect to build on our early momentum," said Jim Compton, UAL's vice chairman and chief revenue officer. "Our team continues to pursue and implement changes that will enhance revenue performance."

United Airlines has come a long way since the attack on the World Trade Center on September 11, 2001. Two of the planes used by al-Qaeda to terrorized our country were United Airlines aircraft. United Airlines Flight 175 was flown into the south World Trade Center tower and United Airlines Flight 93 was crashed in a field in Pennsylvania after the passengers fought back against the hijackers.

As a result of September 11th, the country saw a downturn in the economy, the impact resulted in United Airlines loosing $2.14 billion in 2001. After a failure to secure capital, United filed for bankruptcy protection in December 2002, resulting in the layoffs of thousands of workers, the company closed all of its U.S. city ticket offices, closed a number of maintenance facilities, reduced its fleet size, cancelling several routes, etc. In 2005, United had the largest pension plan default in U.S. corporate history.

As a result of cost cutting measures, United Airlines was able to raise $3 billion to exit bankruptcy. In 2010, United Airlines entered talks with Continental Airlines and in 20112 the two companies merged.
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