One Step Forward, One Step Back(?)
Fresh out of bankruptcy and helped by high ticket prices, UAL --
the parent of United Airlines -- posted a third-quarter net income
of $190 million. The news wasn't as rosy for Northwest Airlines,
however... which continued to lose money as it works to exit
According to TheStreet.com, United posted net income equalling
$1.30 a share, on revenue of $5.2 billion. That's an increase of 11
percent compared to last year... but was less than many analysts
United CFO Jack Brace told reporters the news would have been
brighter had the airline not sent aside 43 cents per share for
income taxes. The airline added it showed a year-over-year $95
million improvement in net income after special items.
United CEO Glenn Tilton attributed the gains to continued
cost-saving measures at the second-largest US carrier.
"One of the things we get to do, post-exit [is] to involve all
of our employees in activity that is much more relevant to them, in
identifying and realizing cost-saving initiatives," he said. "If we
can improve the customer experience, improve employee engagement,
and simultaneously improve our costs, I think we're going to ring
the potential out of this company that has always been here."
Meanwhile, over at Northwest Airlines the story wasn't quite as
rosy. It would have been much better, though, if the carrier
weren't still mired in bankruptcy reorganization.
Northwest reports it generated a net profit of $252 million.
That's a far, and welcome, cry from a year ago at this time -- when
the carrier lost $234 million.
However, due to special items and bankruptcy costs, the carrier
still recorded a staggering net loss of $1.2 billion for the
quarter, due in large part to losses in September. The carrier lost
$337 million in that month alone, as nervous fliers tended to stay
home following the August discovery of a terror plot in London
targeting airliners, and subsequent security restrictions.
And it would have been worse, had ticket prices not overcome
increased fuel costs.
"Our third-quarter results are a significant improvement over
last year's results and demonstrate further that we are making
steady progress in restructuring Northwest Airlines," said CEO Doug
Steenland in a prepared statement. "However, our September loss
indicates that we still have work to do in order to reach our goal
of sustained profitability."
Northwest stressed its earlier prediction the carrier would
report a loss -- this time, excluding reorg costs -- for the last
four months of the year. Overall, however, the carrier said it
expects a modest 2 percent profit for the year overall.
Aviation consultant Mike Boyd told TheStreet.com Northwest is
"They have a clear vision of what they want to do," Boyd said.
"They understand that their service from China will dump people in
Detroit, and that those people will travel all over the system
after that. They will also have the (Boeing) 787 years before