United’s Q1 profit fell 69%, before dragging incident

dallas — United Airlines’ profit plunged 69 per cent in the first three months of the year, and that was before the terrible publicity surrounding the dragging of a bloodied passenger off a plane.

The cost of fuel, labor and maintenance all rose sharply in the first quarter, helping push United’s profit down to $96 million, despite higher revenue.

The results released Monday beat Wall Street expectations, however. United performed better by other measures — more cancellation-free days, fewer lost bags.

The power to raise prices was also swinging United’s way. A key revenueper-mile figure was flat, adding to evidence that a twoyear decline in average fares is over. United expects the revenue-per-mile figure to rise by 1 to 3 per cent in the second quarter.

It is unclear whether last week’s incident in which Chicago airport officers dragged a 69-year-old man off a United Express plane will halt United’s progress.

CEO Oscar Munoz issued another apology on Monday. “It is obvious from recent experiences that we need to do a much better job serving our customers,” Munoz said in a statement. He said the company is “dedicated to setting the standard for customer service among US airlines.” While the April 9 United Express Flight 3411 made headlines all last week, it has had little effect on United’s stock. United Continental Holdings Inc. stock fell about the same as shares of Delta, Alaska and JetBlue last week.

Ahead of its report, United led a rally in airline stocks Monday. The Chicago-based company’s shares rose $1.70, or 2.5 per cent, to close at $70.77. After the financial results were released, the shares gained another 73 cents in after-hours trading.

Excluding nonrepeating items, United said firstquarter profit was 41 cents per share. Wall Street expected 38 cents per share, according to a FactSet survey of 16 analysts.

Revenue rose 3 per cent to $8.42 billion, also topping forecasts. But operating costs jumped 8 per cent, driven by a 28 per cent increase in fuel, a seven per cent rise in labor, and a 13 per cent in maintenance and repair expenses. — AP

It is obvious from recent experiences that we need to do a much better job serving our customers

Oscar Munoz, CEO, United Airlines