Huge fuel savings give United Airlines record profit

NEW YORK CITY, USA – United Airlines reported record earnings of $1.2 billion for the second quarter Thursday helped by a $1 billion fall in fuel costs.

Passenger, cargo and other operating revenues fell 2.6 percent in the April-June period to $9.9 billion, but that was more than offset by the 34 percent fall in fuel costs, normally the largest cost for an airline, compared with a year ago.

Net income was up 51.2 percent from a year earlier and earnings per share surged 48.1 percent to $3.14.

The company moved to share some of the boon with shareholders, announcing a $3 billion share repurchase plan through 2017, on top of an existing $1 billion buyback program.

“This quarter’s record results reflect the progress we’re making on our long-term plan,” said chairman and chief executive Jeff Smisek in a statement.

“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.”

The Chicago-based airline, under parent United Continental Holdings, said its capital return surged to 18.2 percent in the year to June 30.

The results showed some deterioration due to the addition of capacity. Passenger revenue per available seat mile, a key measure of operating efficiency, fell 3.4 percent, mainly due to sharp falls in international service, especially that serving Asia. Domestically the gauge rose 0.2 percent.
United shares surged 4.0 percent to $59.37 in opening trade. – Rappler.com