UA Says Quarterly Unit Revenue May Fall Up To 13.3%

CaptJax

Well-known member
Joined
Mar 3, 2006
Posts
310
Total Time
some
UAL Says Quarterly Unit Revenue May Fall Up to 13.3% (Update4)

By Mary Schlangenstein
March 20 (Bloomberg) -- United Airlines, the third-biggest U.S. carrier, said first-quarter unit revenue may fall as much as 13.3 percent as the recession erodes travel demand.
Revenue from each seat flown a mile in its main jet operations is expected to decline in a range of 12.3 percent to 13.3 percent from a year earlier, United parent UAL Corp. said today in a regulatory filing. Traffic, in miles flown by paying passengers, may drop as much as 16.2 percent, the company said.
United joins AMR Corp.’s American Airlines and Continental Airlines Inc. in forecasting declines in unit revenue as fewer people travel and as carriers offer lower fares in an effort to boost demand.
“The revenue environment continues to be challenging for all carriers, as the impact of the economy is affecting demand for both business and leisure travel,” Kathryn Mikells, chief financial officer for Chicago-based UAL, told employees in a message today.
Jamie Baker, a JPMorgan Chase & Co. analyst, revised his first-quarter loss estimate for UAL to $4.37 a share from $3.87 as United’s unit revenue decline was wider than his expectation of a 4.5 percent drop. Helane Becker, a Jesup & Lamont analyst, widened her per-share loss estimate to $4 from $3.47. The New York-based analysts both recommend buying UAL shares.
UAL fell 71 cents, or 14 percent, to $4.48 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have declined 81 percent in the past 12 months.
Cost to Rise
The first-quarter cost to fly each seat a mile, excluding fuel, unspecified accounting charges and regional partners, is expected to rise in a range of 1 percent to 1.5 percent from a year earlier, the carrier said. In January, United forecast a 5 percent increase.
Unit revenue including regional jet partners may fall 11 percent to 12 percent in the quarter, United said. Traffic on that basis may drop as much as 14.5 percent, the carrier said.
UAL said it will end the quarter with as much as $2.2 billion in cash not dedicated to specific uses. The carrier estimated it will have $80 million in cash losses from fuel- hedging contracts that settled in the quarter.
Alaska Airlines, a unit of Alaska Air Group Inc., said today that unit revenue fell 3.9 percent in February and 1.3 percent for the quarter’s first two months. Traffic declined 10.2 percent in February and 7.5 percent for the first two months, the Seattle-based airline said in a regulatory filing.
“We continue to see a softness in both demand and yields,” Andrew Harrison, Alaska Air’s vice president of planning and revenue management, said in an interview. “We haven’t seen the bottom yet. Summer will be a very important telltale and indication for the fall and winter to come.”
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net Last Updated: March 20, 2009 16:56 EDT
 

Skippy

Well-known member
Joined
Jan 14, 2002
Posts
561
Total Time
N/a
this group couldnt sell oxygen in space.

oh and i cant wait to hear about this new "TA" that "may" help mitgate furloughs, improve QOL, and decrease fatigue----- yeah right

SKIPPY



i thought the first quarter was the last quarter to involve the bad hedging-- that was from the new chic that took the higher up position mikhalis or something-- why now do soem of the articles state that it will be spread out over the entire year? everyday they come up with new schit.
 

maxblast72

Well-known member
Joined
Jun 5, 2006
Posts
931
Total Time
9000+
United is not the only airline to have RASM problems but they might be in the toughest position. They are cutting capacity 10-15% year over year and still losing 13% on the RASM side. That shows how severe this falloff in business travel is.

Airtran last week only forecast a 2-3% dropoff in total RASM for the first quarter. Difference between United (or any legacy) and Airtran (or any LCC) is that the legacies depend on the $1000/flight business traveler for strong RASM performance and the LCCs depend on the $100-$200 leisure traveler for the bulk of their business. While both categories are hurting right now, the dropoff in business travel is really hurting the legacies.
 
Last edited:

crj567

Well-known member
Joined
Sep 20, 2008
Posts
2,052
Did anyones revenue stream increase in this economy?????
Pretty sure bankruptcy law firms ain't hurting for business..... I think Obama will keep them busy for a few years.

P.S.- How are all those INTL routes from your new "inspired" mgmt doing of late? Hmmm.....
 

Shrek

Well-known member
Joined
Oct 25, 2005
Posts
1,640
Total Time
10000
Pretty sure bankruptcy law firms ain't hurting for business..... I think Obama will keep them busy for a few years.

P.S.- How are all those INTL routes from your new "inspired" mgmt doing of late? Hmmm.....
80 mil is better than last quarter.......

Not expecting miracles but improvement is better than none.......

Maybe we will need to M E R G E to stay afloat and then all of a sudden a multi-million dollar quarter - those accountants don't know how to hide a zero or seven do they? :beer:
 

crj567

Well-known member
Joined
Sep 20, 2008
Posts
2,052
80 mil is better than last quarter.......

Not expecting miracles but improvement is better than none.......

Maybe we will need to M E R G E to stay afloat and then all of a sudden a multi-million dollar quarter - those accountants don't know how to hide a zero or seven do they? :beer:
Here's hoping you merge with some airline a hell of a lot better than NWA....
 

Shrek

Well-known member
Joined
Oct 25, 2005
Posts
1,640
Total Time
10000
Here's hoping you merge with some airline a hell of a lot better than NWA....
Here is hoping that Tilton is the worst of our problems ....... cheers :beer:
 

NuGuy

Ex-Commuter
Joined
May 30, 2003
Posts
2,375
Total Time
10000
Here's hoping you merge with some airline a hell of a lot better than NWA....
Heyas,

Doubt it. Delta was the pick of the litter. Glad to see NWA picked them up.

Nu
 

Mike man

Funk Master Flex
Joined
Oct 8, 2003
Posts
1,387
Total Time
5000+
Did anyones revenue stream increase in this economy?????
Companies that make booze, smokes and of course WalMart.

I wonder if their revenue decreased due to the distance of their hubs from their executives? Like the profits from last year.
 
Top