CHICAGO - United Airlines (UAL) today announced its first-quarter 2017 financial results.

  • UAL reported first-quarter net income of $96 million, diluted earnings per share of $0.31, pre-tax earnings of $145 million and pre-tax margin of 1.7 percent.
  • Excluding special items, UAL reported first-quarter net income of $129 million, diluted earnings per share of $0.41, pre-tax earnings of $196 million and pre-tax margin of 2.3 percent.

Oscar Munoz, chief executive officer of United Airlines, said, “In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building. It is obvious from recent experiences that we need to do a much better job serving our customers. The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the center of everything we do. We are dedicated to setting the standard for customer service among U.S. airlines, as we elevate the experience our customers have with us from booking to baggage claim.”

First-Quarter Revenue

For the first quarter of 2017, revenue was $8.4 billion, an increase of 2.7 percent year-over-year. First-quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was flat and consolidated yield increased 0.4 percent compared to the first quarter of 2016.

Scott Kirby, president of United Airlines, said, “United is delivering on the commitments we made at investor day last fall. We saw positive trends in the revenue environment in the quarter and are optimistic about the year ahead. Looking forward, we expect second-quarter consolidated PRASM to be up 1.0 to 3.0 percent. This would mark the fifth straight quarter of sequential improvement and the first quarter of positive unit revenue growth in two years.”

First-Quarter Costs

Operating expense was $8.1 billion in the first quarter, up 7.9 percent year-over-year. Excluding special charges, operating expense was $8.1 billion, a 10.0 percent increase year-over-year. Consolidated unit cost per available seat mile (CASM) increased 5.1 percent compared to the first quarter of 2016 due largely to higher fuel expense and the impact of labor agreements ratified in 2016. First-quarter consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 5.0 percent year-over-year, driven mainly by higher labor expense.

Liquidity and Capital Allocation

In the first quarter of 2017, UAL increased its revolving credit facility by $650 million to a total capacity of $2.0 billion with the full amount currently undrawn and increased its existing term loan by approximately $440 million with more favorable terms and rates. Also in the first quarter, the company raised $300 million of unsecured debt at 5 percent.

UAL generated $547 million in operating cash flow and ended the quarter with $6.4 billion in unrestricted liquidity, including its $2.0 billion revolving credit facility. The company’s capital expenditures were $691 million in the first quarter. Including assets acquired through the issuance of debt and airport construction financing and excluding fully reimbursable projects, the company invested $1.4 billion during the first quarter in adjusted capital expenditures. The company contributed $80 million to its pension plans and made debt and capital lease principal payments of $346 million in the first quarter.

For the 12 months ended March 31, 2017, the company’s pre-tax income was $3.5 billion and return on invested capital (ROIC) was 17.5 percent. In the quarter, UAL purchased $0.3 billion of its common shares at an average price of $68.41 per share. As of March 31, 2017, the company had approximately $1.5 billion remaining to purchase shares under its existing share repurchase authority.

Andrew Levy, executive vice president and chief financial officer of United Airlines, said, “During the quarter, we improved our liquidity and continued to return cash to shareholders. We remain focused on maintaining a strong balance sheet and finding incremental cost savings opportunities.”

For more information on UAL’s second-quarter 2017 guidance, please visit for the company’s investor update.

First-Quarter Highlights

Customer Experience

  • Modernized airport screening experience with fully redesigned security checkpoint at Newark Liberty International Airport.
  • Debuted new Terminal C North at Houston’s George Bush Intercontinental Airport – elevating the customer experience with roomier gate areas, the latest technology and chef-inspired dining choices.
  • United named “Eco-Airline of the Year” from Air Transport World magazine for its leadership in environmental action.
  • Launched United Jetstream, a new online portal for corporate and travel agency customers that simplifies the travel management process and gives customers an intuitive suite of self-service tools.
  • Launched new Basic Economy fare for travel between Minneapolis/St. Paul and any of United’s seven U.S. hubs.

Network and Fleet

  • Began implementing plan to improve the company’s route network with more destinations, more flights and more convenient connections, with expectations to add service to 31 destinations across the U.S. and Europe in 2017.
  • Took delivery of six Boeing 777-300ER aircraft, two Boeing 787-9 aircraft and one used Airbus A319 aircraft in the quarter.
  • Purchased 12 currently operated Boeing 737NG aircraft previously leased to the company.
  • Entered into a new partnership with Air Wisconsin Airlines to operate 50 regional jets under the United Express brand.

Operations and Employees

  • Achieved a record-setting 25 zero-cancellation days for the mainline operation in the quarter.
  • Consolidated completion factor was 97.5 percent in the first quarter, 0.6 points higher than the 96.9 percent from first-quarter 2016. This represents over 2,500 fewer flight cancellations compared to the first quarter of 2016.
  • Achieved best-ever consolidated on-time departure rate for both February and March and lowest-ever first-quarter mishandled bag rate in company history.
  • Employees earned cash-incentive payments of approximately $18 million for achieving operational performance goals in the quarter.

About United

United Airlines and United Express operate approximately 4,500 flights a day to 337 airports across five continents. In 2016, United and United Express operated more than 1.6 million flights carrying more than 143 million customers. United is proud to have the world’s most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 743 mainline aircraft and the airline’s United Express partners operate 478 regional aircraft. The airline is a founding member of Star Alliance, which provides service to 190 countries via 28 member airlines. For more information, visit, follow @United on Twitter or connect on Facebook. The common stock of United’s parent, United Continental Holdings, Inc., is traded on the NYSE under the symbol “UAL”.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this release are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and anticipated financial and operating performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Words such as “expects,” “will,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “goals” and similar expressions are intended to identify forward-looking statements. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to us on the date of this release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law. Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: our ability to comply with the terms of our various financing arrangements; the costs and availability of financing; our ability to maintain adequate liquidity; our ability to execute our operational plans and revenue-generating initiatives, including optimizing our revenue; our ability to control our costs, including realizing benefits from our resource optimization efforts, cost reduction initiatives and fleet replacement programs; costs associated with any modification or termination of our aircraft orders; our ability to utilize our net operating losses; our ability to attract and retain customers; potential reputational or other impact from adverse events in our operations; demand for transportation in the markets in which we operate; an outbreak of a disease that affects travel demand or travel behavior; demand for travel and the impact that global economic and political conditions have on customer travel patterns; excessive taxation and the inability to offset future taxable income; general economic conditions (including interest rates, foreign currency exchange rates, investment or credit market conditions, crude oil prices, costs of aircraft fuel and energy refining capacity in relevant markets); our ability to cost-effectively hedge against increases in the price of aircraft fuel if we decide to do so; any potential realized or unrealized gains or losses related to fuel or currency hedging programs; economic and political instability and other risks of doing business globally; the effects of any hostilities, act of war or terrorist attack; the ability of other air carriers with whom we have alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the effects of any technology failures or cybersecurity breaches; disruptions to our regional network; the costs and availability of aviation and other insurance; industry consolidation or changes in airline alliances; the success of our investments in airlines in other parts of the world; competitive pressures on pricing and on demand; our capacity decisions and the capacity decisions of our competitors; U.S. or foreign governmental legislation, regulation and other actions (including Open Skies agreements and environmental regulations); the impact of regulatory, investigative and legal proceedings and legal compliance risks; the impact of any management changes; labor costs; our ability to maintain satisfactory labor relations and the results of any collective bargaining agreement process with our union groups; any disruptions to operations due to any potential actions by our labor groups; weather conditions; and other risks and uncertainties set forth under Part I, Item 1A., “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as well as other risks and uncertainties set forth from time to time in the reports we file with the U.S. Securities and Exchange Commission.

-tables attached-

Three Months Ended March 31, % Increase/ (Decrease)
(In millions, except per share data) 2017 2016
Operating revenue:
Passenger - Mainline $ 5,831 $ 5,577 4.6
Passenger - Regional 1,343 1,413 (5.0)
Total passenger revenue (B) 7,174 6,990 2.6
Cargo 220 194 13.4
Other operating revenue 1,026 1,011 1.5
Total operating revenue 8,420 8,195 2.7
Operating expense:
Salaries and related costs 2,661 2,490 6.9
Aircraft fuel (C) 1,560 1,218 28.1
Landing fees and other rent 544 525 3.6
Regional capacity purchase 536 522 2.7
Depreciation and amortization 518 479 8.1
Aircraft maintenance materials and outside repairs 454 402 12.9
Distribution expenses 307 303 1.3
Aircraft rent 179 178 0.6
Special charges (D) 51 190 NM
Other operating expenses 1,332 1,239 7.5
Total operating expense 8,142 7,546 7.9
Operating income 278 649 (57.2)
Operating margin 3.3 % 7.9 % (4.6) pts.
Operating margin, excluding special charges (A) (Non-GAAP) 3.9 % 10.2 % (6.3) pts.
Nonoperating income (expense):
Interest expense (150) (159) (5.7)
Interest capitalized 23 14 64.3
Interest income 11 8 37.5
Miscellaneous, net (D) (17) (18) (5.6)
Total nonoperating expense (133) (155) (14.2)
Income before income taxes 145 494 (70.6)
Pre-tax margin 1.7 % 6.0 % (4.3) pts.
Pre-tax margin, excluding special items (A) (Non-GAAP) 2.3 % 8.4 % (6.1) pts.
Income tax expense (E) 49 181 (72.9)
Net income $ 96 $ 313 (69.3)
Earnings per share, diluted $ 0.31 $ 0.88 (64.8)
Weighted average shares, diluted 315 355 (11.3)
NM Not meaningful

Three Months Ended March 31, % Increase/ (Decrease)
2017 2016
Passengers (thousands) 23,825 22,277 6.9
Revenue passenger miles (millions) 42,183 40,856 3.2
Available seat miles (millions) 53,054 51,165 3.7
Cargo ton miles (millions) 748 622 20.3
Passenger revenue per available seat mile (cents) 10.99 10.90 0.8
Average yield per revenue passenger mile (cents) 13.82 13.65 1.2
Aircraft in fleet at end of period 743 719 3.3
Average stage length (miles) 1,802 1,859 (3.1)
Average daily utilization of each aircraft (hours) 9:45 9:36 1.6
Passengers (thousands) 9,280 9,810 (5.4)
Revenue passenger miles (millions) 5,428 5,726 (5.2)
Available seat miles (millions) 6,754 7,108 (5.0)
Passenger revenue per available seat mile (cents) 19.88 19.88
Average yield per revenue passenger mile (cents) 24.74 24.68 0.2
Aircraft in fleet at end of period 478 503 (5.0)
Average stage length (miles) 573 575 (0.3)
Consolidated (Mainline and Regional):
Passengers (thousands) 33,105 32,087 3.2
Revenue passenger miles (millions) 47,611 46,582 2.2
Available seat miles (millions) 59,808 58,273 2.6
Passenger load factor:
Consolidated 79.6 % 79.9 % (0.3) pts.
Domestic 83.3 % 82.9 % 0.4 pts.
International 75.2 % 76.4 % (1.2) pts.
Passenger revenue per available seat mile (cents) 12.00 12.00
Total revenue per available seat mile (cents) 14.08 14.06 0.1
Average yield per revenue passenger mile (cents) 15.07 15.01 0.4
Aircraft in fleet at end of period 1,221 1,222 (0.1)
Average stage length (miles) 1,451 1,461 (0.7)
Average full-time equivalent employees (thousands) 85.2 82.5 3.3

Note: See Part II, Item 6 Selected Financial Data of the company’s annual report on Form 10-K for the year ended December 31, 2016 for the definition of these statistics.

Note (A) provides a reconciliation of non-GAAP financial metrics to the comparable GAAP financial metrics and provides the reasons UAL management believes these financial metrics are useful.
Three Months Ended March 31, % Increase/ (Decrease)
2017 2016
(In millions, except per share data)
Operating income (GAAP) $ 278 $ 649 (57.2)