OREANDA-NEWS. United Airlines (UAL) today reported first-quarter 2015 net income of USD 582 million, or USD 1.52 per diluted share, excluding USD 74 million of special items. Including special items, UAL reported first-quarter net income of USD 508 million, or USD 1.32 per diluted share. These results are a record first-quarter profit for the company.
* UAL earned a 17.1 percent return on invested capital for the 12 months ended March 31, 2015.
* UAL's consolidated passenger revenue per available seat mile (PRASM) increased 0.4 percent for first-quarter 2015 compared to first-quarter 2014.
* First-quarter 2015 consolidated unit costs (CASM), excluding special charges, third-party business expenses, fuel and profit sharing, decreased 1.5 percent year-over-year on a consolidated capacity increase of 0.1 percent. First-quarter 2015 CASM, including those items, decreased 13.1 percent year-over-year.
* In the quarter, UAL returned approximately USD 200 million to shareholders as part of its previously announced USD 1 billion share buyback program.
* In the quarter, UAL prepaid approximately USD 120 million of debt and announced its intention, in the second quarter, to prepay USD 601 million of its 6 percent notes due 2026 and 2028.

"This quarter we reported a profit of nearly USD 600 million, excluding special items, a USD 1 billion improvement compared to the first quarter of 2014, and I'd like to thank the United team for all their great work," said Jeff Smisek, UAL's chairman, president and chief executive officer. "We continued to improve our operational reliability and deliver products that enhance our customers' experience, including new aircraft, improved food, new inflight entertainment options and modern facilities. We are making significant progress on our long-term plan to reduce costs, improve our margins and grow our earnings, and expect our second quarter pre-tax margin to be between 12 and 14 percent, excluding special items."

For the first quarter of 2015, total revenue was USD 8.6 billion, a decrease of 1.0 percent year-over-year. First-quarter consolidated passenger revenue increased 0.5 percent to USD 7.4 billion, compared to the same period in 2014. Ancillary revenue per passenger in the first quarter increased 8.6 percent year-over-year to more than USD 23 per passenger. First-quarter cargo revenue grew 15.8 percent year-over-year to USD 242 million. Other revenue in the first quarter decreased 14.2 percent year-over-year, mostly due to the reduction in sales of fuel to a third party. The corresponding expense decline from this reduction appears in third-party business expense.

Consolidated revenue passenger miles increased 0.1 percent and consolidated available seat miles increased 0.1 percent year-over-year for the first quarter, resulting in a first-quarter consolidated load factor of 81.1 percent.
First-quarter 2015 consolidated PRASM increased 0.4 percent and consolidated yield increased 0.4 percent compared to the first quarter of 2014.

"This quarter our PRASM performance reflected good progress on our revenue initiatives," said Jim Compton, UAL's vice chairman and chief revenue officer. "We will continue to match capacity with demand while making the appropriate network, fleet and product decisions to enhance revenue and margin performance, while improving our customers' experience."

First-quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, decreased 1.5 percent compared to the first quarter of 2014.  The improved cost performance was driven by the better-than-expected performance from the company's Project Quality efficiency program and strong U.S. dollar. First-quarter consolidated CASM including those items decreased 13.1 percent.

First-quarter total operating expenses, excluding special charges, decreased USD 1.19 billion, or 13.2 percent, year-over-year. Including special charges, total operating expenses decreased USD 1.18 billion, or 13.0 percent, in the first quarter versus the same period in 2014.

In the first quarter, UAL generated over USD 1 billion in free cash flow, and ended the quarter with USD 7.0 billion in unrestricted liquidity, including USD 1.35 billion of undrawn commitments under its revolving credit facility. During the first quarter, the company had gross capital expenditures of USD 794 million, excluding fully reimbursable projects. The company contributed approximately USD 180 million to its pension plans and made debt and capital lease principal payments of USD 320 million in the first quarter, including approximately USD 120 million of prepayments. UAL also announced its intention to prepay the remaining USD 303 million of 6 percent notes due 2026 on April 1, 2015 and to prepay USD 298 million of 6 percent notes due 2028 on May 1, 2015.

As part of UAL's USD 1 billion share buyback program, the company spent approximately USD 200 million in share repurchases in the first quarter. Through the first quarter, UAL has returned a total of approximately USD 520 million to shareholders under the program.

For the 12 months ended March 31, 2015, the company's return on invested capital was 17.1 percent.

For more information on UAL's second-quarter 2015 guidance, please visit ir.united.com for the company's investor update.