Category Archives: United Airlines

United Airlines announces its highest-ever quarterly profit

United Airlines (Chicago) today reported its largest quarterly profit ever, reporting a second quarter 2015 net profit of $1.3 billion, or $3.31 per diluted share, excluding $67 million of special items.

The company issued this report:

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United Airlines (UAL) today reported second-quarter 2015 net income of $1.3 billion, or $3.31 per diluted share, excluding $67 million of special items. Including special items, UAL reported second-quarter net income of $1.2 billion, or $3.14 per diluted share. These results are a record quarterly profit for the company.

  • The company’s Board of Directors authorized an additional $3 billion share repurchase program, which the company expects to complete by the end of 2017.
  • In the quarter, UAL prepaid approximately $800 million of debt, contributed approximately $620 million to its pension plans and returned approximately $250 million to shareholders as part of its existing $1 billion share buyback program.
  • UAL earned an 18.2 percent return on invested capital for the 12 months ended June 30, 2015.

“This quarter’s record results reflect the progress we’re making on our long-term plan, and I’d like to thank the United team for their great work,” said Jeff Smisek, UAL’s chairman, president and chief executive officer. “The $3 billion share repurchase program we announced today demonstrates the confidence we have in our future. We will continue to invest in our customers, assets and our people, and remain committed to improving our balance sheet, expanding our margins and improving our return on invested capital, and expect our third quarter pre-tax margin to be between 13.5 and 15.5 percent, excluding special items.”

Second-Quarter Revenue and Capacity

For the second quarter of 2015, total revenue was $9.9 billion, a decrease of 4 percent year-over-year. Second-quarter consolidated passenger revenue decreased 3.4 percent to $8.7 billion, compared to the same period in 2014. Ancillary revenue per passenger in the second quarter increased 6.7 percent year-over-year. Second-quarter cargo revenue decreased 1.3 percent year-over-year to $229 million. Other revenue in the second quarter decreased 9.6 percent year-over-year, mostly due to the reduction in sales of fuel to a third party. The corresponding expense decline from this reduction appears in third-party business expense.

Consolidated revenue passenger miles increased 0.7 percent and consolidated available seat miles increased 2.3 percent year-over-year for the second quarter, resulting in a second-quarter consolidated load factor of 83.9 percent.

Second-quarter 2015 consolidated PRASM decreased 5.6 percent and consolidated yield decreased 4.1 percent compared to the second quarter of 2014.

“This quarter, we continued to build and refine our route network, including announcing the move of p.s. transcontinental service to our global gateway hub at Newark Liberty Airport and forming a long-term partnership with Azul Brazilian Airlines. These decisions will enhance our network and provide our customers with more choice and convenience,” said Jim Compton, UAL’s vice chairman and chief revenue officer. “We will continue to improve our leading network by focusing on our strengths, while investing in our people, fleet and products to increase revenue and deliver a flyer-friendly customer experience.”

Read the full report: CLICK HERE

Copyright Photo: Javier Rodriguez/AirlinersGallery.com. United has 23 aging Boeing 747-400s that will be eventually replaced with newer Airbus A350-1000s and Boeing 787-10 Dreamliners. Boeing 747-422 N199UA (msn 29717) arrives in Frankfurt.

United Airlines aircraft slide show (current livery only): AG Airline Slide Show

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United Airlines to end two routes from Guam

United Airlines (Chicago) will drop two routes from Guam in late September. The carrier will end the Guam – Cairns route on September 26 and the Guam – Seoul (Incheon) route on September 30 per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-824 N37274 (msn 31592) departs from Los Angeles International Airport.

United Airlines aircraft slide show: AG Airline Slide Show

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United to add winter seasonal service to St. Lucia from Chicago

United Airlines (Chicago) on December 19 will add weekly Boeing 737-800 jet service from its Chicago (O’Hare) hub to St. Lucia in the Caribbean per Airline Route.

Copyright Photo: Chris Sands/AirlinersGallery.com. Boeing 737-824 N37277 (msn 31595) with APB Split Scimitar Winglets departs from Calgary.

United Airlines aircraft slide show (current livery): AG Airline Slide Show

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United Airlines ground stoppage has been lifted

United Airlines (Chicago) earlier today had a full system-wide ground stoppage this morning  due to an unspecified computer problem. The stoppage reportedly affected all flights this morning for about an hour. This was the second computer glitch problem in two months.

The airline issued this short statement:

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“We experienced a network connectivity issue. We are working to resolve and apologize for any inconvenience.”

The FAA has now confirmed the ground stoppage has been resolved and lifted.

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The Emirates response to alleged government subsidies “Open Skies” issues

Emirates (Dubai) has set up this response page to the on-going Open Skies allegations of government subsidies mainly by the U.S. Big Three carriers: CLICK HERE

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From the report: The maps below show that Emirates is providing vital routes to the US via its hub in Dubai that the three leading US carriers do not offer. So despite their claims that Emirates is stealing away passengers, these maps illustrate that in reality there are very few network similarities between Emirates and the big three US carriers. Moreover, of course, there is no US national interest in sacrificing the competitive choice of US consumers to protect inconvenient traffic flows over European hubs to benefit some European airline partners of US airlines.

Delta-Emirates routes

United-Emirates routes

American-Emirates routes

United Airlines purchases a stake in Fulcrum BioEnergy for $30 million

United Airlines (Chicago) today announced an historic $30 million equity investment in U.S.-based alternative fuels developer Fulcrum BioEnergy, Inc., a pioneer in the development and commercialization of converting municipal solid waste into low-cost sustainable aviation biofuel. It is also the single largest investment by a U.S. airline in alternative fuels and sets United apart in the aviation industry in the advancement of aviation biofuels and carbon emissions reductions. In addition to the equity investment, United and Fulcrum have entered into an agreement that contemplates the joint development of up to five projects located near United’s hubs expected to have the potential to produce up to 180 million gallons of fuel per year.

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Fulcrum Video:

United has also negotiated a long-term supply agreement with Fulcrum and, subject to availability, will have the opportunity to purchase at least 90 million gallons of sustainable aviation fuel a year for a minimum of 10 years at a cost that is competitive with conventional jet fuel. This alternative fuel will be a drop-in fuel that meets all of the airline’s technical requirements and specifications, and will power the aircraft in the same way as conventional jet fuel. Fulcrum expects its first alternative fuels plant to begin commercial operation in 2017.

Fulcrum’s Waste-to-Biofuel Technology

Fulcrum’s technology converts household trash, known as municipal solid waste (MSW), into renewable jet fuel. Fulcrum’s renewable jet fuel is expected to provide a greater than 80 percent reduction in lifecycle carbon emissions when compared to conventional jet fuel. Fulcrum
has successfully developed and proven its technology to convert MSW into low-cost, low-carbon transportation fuels in an innovative, clean and efficient thermochemical process. MSW is an attractive biofuel feedstock as it is low cost, has limited volatility and a virtually unlimited supply. United’s agreement with Fulcrum is expected to decrease the airline’s carbon footprint through the use of sustainable aviation biofuel, while also diverting waste from landfills and creating new jobs in those communities where new Fulcrum facilities are sited. Fulcrum’s projects have also received support and participation from the U.S. Air Force and U.S. Navy for the future production of fuel that meets military specifications.

United From Trash to Energy poster (UA)(LR)

 

United’s Track Record in Aviation Biofuels

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United is the first U.S. airline to invest in a biofuel company. It is another in a series of firsts for the airline which, since 2009, has made significant investments in the advancement of sustainable aviation biofuels.

In 2009, United made history as the first North American carrier to perform a two-engine aircraft demonstration flight using sustainable biofuels.

In 2011, United operated the first U.S. passenger flight powered by advanced biofuels made from algae.

In 2012, United spearheaded the Midwest Aviation Sustainable Biofuel Initiative (MASBI), a public/private partnership of experts from across the Midwest Region, to accelerate the commercialization of advanced biofuels for aviation.

In 2013, United announced an agreement with AltAir Fuels for advanced aviation biofuels to be used on flights out of the airline’s Los Angeles hub, making it the first U.S. carrier to execute a commercial scale agreement for aviation biofuels. United expects to begin regularly scheduled flights using AltAir’s fuel later this year.

In 2015, United received the World Bio Markets (WBM) Award for Excellence in Advanced Biofuels.

United Eco-Skies logo

Top Copyright Photo: Tony Storck/AirlinersGallery.com. United’s Boeing 737-924 ER N75432 (msn 32835) is painted in this special Eco-Skies livery (inherited from Continental Airlines). N75432 lands at Baltimore/Washington (BWI).

United Airlines aircraft slide show (current livery): AG Airline Slide Show

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United Airlines and Azul announce a strategic partnership, United to acquire 5% of Azul’s stock

United Airlines (Chicago) and Azul Linhas Aereas Brasileiras (Azul Brazilian Airlines) (Sao Paulo) today (June 26) announced a new strategic partnership in which United will acquire an approximate 5 percent stake in Azul, Brazil’s third-largest airline, paving the way for the carriers to cooperate on a range of customer benefits including codesharing of flights (subject to government approval), expanded connection opportunities on routes between the United States and Brazil, in addition to other points in North and South America, and joint loyalty-program participation.

Through a wholly owned subsidiary, United will invest $100 million for its economic stake in Azul, which includes one seat on Azul’s board of directors.

As a result of the partnership, United and Azul will expand their frequent flyer loyalty agreement.

United-Azul announcement (RDC)(LRW)

Copyright Photo Above: Rodrigo Cozzato/AirlinersGallery.com. The announcement ceremony in Sao Paulo today.

United began serving Brazil in 1992, with flights to both Rio de Janeiro and Sao Paulo. The airline currently operates five daily flights to Brazil from its Chicago (O’Hare), Houston (Bush Intercontinental)Newark and Washington (Dulles) hubs.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. United Airlines’ Boeing 777-222 ER N229UA (msn 30557) climbs away from Los Angeles International Airport.

United Airlines aircraft slide show: AG Airline Slide Show

Azul aircraft slide show: AG Airline Slide Show

Bottom Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. ATR 727-202 PR-AZS (msn 523) arrives at the Viracopos International Airport (Campinas) base serving the Campinas area near Sao Paulo.