United Airlines posts 7 rst pro7t in 5 years

Net gain comes despite $ 1B in jet fuel expenses Airlines

United Airlines on Monday reported its @ rst quarterly pro @ t in more than @ ve years and said it’s still on track to exit bankruptcy protection by Feb. 1. United, the USA’s second- largest airline, eked out $68 million in net income for the third quarter, excluding $ 1.8 billion in restructuring charges related to its aircraft N eet. It was United’s @ rst pro@ t since the second quarter of 2000, before the 2001 terrorist attacks and United’s Chapter 11 @ ling for bankruptcy reorganization in December 2002. The pro @ t occurred despite more than $1 billion in jet fuel expenses during the quarter, a record for the airline. For the @ rst time in memory, fuel eclipsed labor as United’s single biggest expense. United CFO Jake Brace called the earnings report “ quite an accomplishment” in the face of unprecedented fuel prices. Added Glenn Tilton, United’s CEO: “ The resultswe are reporting make it clear that we have done well this quarter in overall cost control, especially given the signi @ cant reduction in capacity.” But the results were hardly industryleading. The third quarter, which includes the strong summer travel season, is normally the best of the year for airlines and produces the biggest pro @ t. United has spent nearly three years in bankruptcy restructuring cutting costs of labor, aircraft, debt and vendor contracts of all kinds. Yet much smaller Continental Airlines last week posted a pro @ t of $64 million, nearly as large as United’s. Fuel prices remain a huge concern. Going forward, United’s business plan assumes crude oil prices of around $50 a barrel. That is roughly 17% lower than they are now, although crude prices slipped below $60 a barrel Monday. Brace said Monday UAL still believes $50 a barrel is “ a good long- term price” for crude. “ It has a ways to go,” he said. United reported operating earnings of $165 billion, up $245 million over the same quarter a year ago. Passenger revenue for every seat N own one mile rose 11% for United’s main jet N eet. Costs for every seat N own one mile rose 5%. Excluding fuel, unit costs fell 5%. Counting the restructuring charges, United had a $ 1.77 billion loss. On that basis, it was the by far the largest loss of any U.S. airline to report third-quarter results, exceeding Northwest Airlines’ $475 million de @ cit. The parent @ rms of three carriers — Southwest Airlines, Alaska Airlines and Continental Airlines — all turned pro @ ts while American Airlines parent AMR had a $153 million loss. Still to report are Delta Air L ines and US Airways, which now includes the former America West. Both are scheduled to release results Nov. 9. For the @ rst nine months of 2005, UAL reported a net loss of $ 4.3 billion, or $ 36.82 a share, compared with a loss a year earlier of $980 million, or $ 8.77 a share. Nine- month revenues increased 4.8% to $13 billion from $ 12.4 billion. Contributing: The Associated Press