United Airlines turned in
its best quarter in years, a $273 million moneymaker that benefited from
returning business travelers and tight cost controls.
The quarter that ended June
30 brought UAL Corp.’s first profit in almost three years. The adjusted profit
was the company’s largest second-quarter profit since 1999.
United is getting some $400
million a year in baggage fees, but Tague said on a that he personally thinks they could eventually collect $1 billion in baggage fees alone. He noted that United charged for
about 40 percent of the luggage it carried. Other bags — generally on
international flights and those checked by elite frequent fliers — got on the
plane for free.
“It’s my own view that over
time you’ll probably see bag fees become ubiquitous,” he said.
The results at United, the
nation’s third-biggest airline, showed several signs of a recovering economy.
Per-seat revenue rose 26.9 percent, to 13.02 cents per available seat mile.
Cargo revenue increased 57 percent.
United and Delta Air>Lines Inc. are the two biggest U.S. airlines
flying to Asia, a key destination for business travelers. Passenger revenue on
United’s Pacific flights jumped 52.4 percent, to $789 million.
“Our performance across the board is vastly
different than we reported to you just a year ago,” Chief Financial Officer Kathryn
Mikells said on a conference call.
Not counting special
charges, Chicago-based UAL said it would have earned $430 million, or $1.95 per share. Analysts surveyed by Thomson Reuters expected $1.74 per shareon revenue of $5.12
United didn’t predict its
full-year results, but Mikells noted that its workers would get profit-sharing
payments if it makes for the full year. “We feel pretty good right now about our trajectory for the second half of the year,” she said. For the first half of the year, United has
earned $191 million.
United still expects to
close its combination with Continental Airlines Inc. by the end of the year,
its executives said. The two airlines said they have a deal with pilots for a
transition agreement that will cover them after the deal closes but before
they’ve worked out a full joint union contract and seniority list. Pilots at
both airlines are members of the Air Line Pilots Association.