United Airlines pays less at the pump, earns more on the bottom line as 3Q profit soars

MarketsAssociated Press

United Airlines appears to be hitting its stride after struggling to make a 2010 merger pay off.

The airline's formula is lower fuel prices and more revenue for every mile that passengers fly.

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United Continental Holdings Inc. said Thursday that third-quarter net income soared to $924 million, or $2.37 per share, compared with $379 million a year earlier.

Excluding special items, the company said it earned a record adjusted profit of $1.1 billion, or $2.75 per share. Analysts, who usually exclude items, expected $2.70 per share.

Revenue rose 3.3 percent to $10.56 billion, matching the forecast of analysts, according to a FactSet survey. It helped that so-called ancillary revenue rose 10.9 percent as the average passenger paid more than $22 per trip in fees for things such as checked bags and more legroom.

Fuel spending fell 4.1 percent, as the company paid $3.02 per gallon, a dime less than last summer. The figures included United Express regional flights.

United has been plagued by technology glitches that alienated customers; it struggled more than rivals to keep flying during bad weather; and it lagged other airlines when they turned solidly profitable. As recently as the first quarter of this year, United was still losing $609 million while key rivals set profit records.

But the Chicago-based airline earned a $789 million profit in the second quarter, beating Wall Street forecasts, and CEO Jeff Smisek said Thursday that the latest figures showed continued progress. He said the airline still has plenty of opportunities to increase profit margins "and improve the quality and efficiency of everything we do."