Tuesday, October 21st9.0°C
23836
23671

United Airlines can't bring in enough revenue to cover its costs; still struggling with merger

United Airlines is the one U.S. carrier that can't seem to get its act together.

While all the other major airlines made money in the first quarter, United lost $609 million during the first three months of this year.

United attributed $200 million of its loss to the "historic severe" winter weather that impacted much of the U.S. this past winter. But by comparison, Delta Air Lines made $213 million in the same quarter while dealing with the same ice and snow storms.

Chicago-based United is still struggling to combine systems and see financial benefits following its 2010 merger with Continental Airlines. In the first quarter, its cost for each mile passengers flew rose 1 per cent but its related revenue fell 2 per cent. It simply isn't able to charge high enough airfares.

United lost $1.66 per share, worse than the $1.26 per share it lost during the same period last year. Excluding special items, the loss was $1.33 per share, barely beating the $1.35 loss expected by Wall Street analysts surveyed by FactSet.

United's revenue slipped 0.3 per cent to $8.7 billion, just short of the $8.71 billion Wall Street analysts had expected.

The one bright spot for United was that it paid less for fuel: $3.18 a gallon, down from $3.28 during last year's first quarter. Considering that the airline used 916 million gallons during the period, that added up to $133 million in savings.

"While we are not pleased with our first-quarter financial results, we are building a strong foundation that will result in improved financial performance," John Rainey, chief financial officer for United Continental Holdings, Inc., said in a statement.

United also lost $21 million during the quarter due to an exchange rate loss in Venezuela. Approximately $100 million of the company's unrestricted cash balance was held as Venezuelan bolivars as of March 31, 2014. All international airlines flying there have struggled with a quickly devaluing currency and have billions of dollars tied up in bolivars that can't be quickly converted because of Venezuelan currency controls.

__

Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott.

The Canadian Press


Read more Business News

23718


Recent Trending




Today's Market
S&P TSX14520.85+183.08
S&P CDNX822.7211.37
DJIA16563.98164.31
Nasdaq4392.494+76.419
S&P 5001933.32+29.31
CDN Dollar0.8915+0.0056
Gold1251.80+7.1001
Oil81.87+0.49
Lumber331.10+0.20
Natural Gas3.68+0.01

 
Okanagan Companies
Pacific Safety0.10-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.15+0.03
Cantex0.055-0.025
Anavex Life Sciences0.195+0.004
Metalex Ventures0.050.00
Russel Metals33.14+0.86
Copper Mountain Mining2.16+0.17
Colorado Resources0.145-0.005
ReliaBrand Inc0.0111-0.0019
Sunrise Resources Ltd0.060.00
Mission Ready Services0.46+0.01

 



23265

FEATURED Property
1995654166 Terrace Hill Court
4 bedrooms 4 baths
$749,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_



23803




Member of BC Press Council


23824