It’s been a decade since United reported a first quarter operating profit, but in a sign that the airline industry is recovering, UA reported a $58MN operating profit today.
Still, UA lost $82MN or $0.49/share overall–a big improvement over their $382MN loss a year earlier, but still a loss.
Despite the improving outlook, United officials say the airline will remain cautious on capacity growth. "While the revenue environment is improving, we remain committed to capacity discipline," United President John Tague is quoted as saying by BusinessWeek. "As we have said before, we firmly believe that the only way the industry can fully recover and meet its financial targets is through capacity discipline. Capacity simply must be at a level that allows for compensatory pricing."
Based on the high prices I have been paying for tickets lately and full planes, UA is doing a good job managing capacity.
In other news, a merger announcement may be very close. With CO’s losses higher than expected in the First Quarter, UA is positioning itself nicely to resolve the CO-UA issues of contention in their favor.
Leave a Reply