OREANDA-NEWS. "I want to thank all of our employees for their hard work, professionalism and contributions to another successful quarter. The United family has had a challenging few weeks, but we have never felt more unified and are committed to making the right investments in our people and providing them the tools they need to deliver excellent service to our customers," said Brett Hart, acting CEO of United. "With Oscar Munoz on medical leave, this leadership team and I are working to push forward the agenda we laid out over the past six weeks by focusing on our employees, improving our processes and investing in our systems to further improve our margins."

Third-Quarter Revenue and Capacity

For the third quarter of 2015, total revenue was $10.3 billion, a decrease of 2.4 percent year-over-year. In the quarter, the company amended its co-branded credit card marketing services agreement, which led to approximately $100 million of incremental revenue. This was more than offset by the declines in passenger revenue. 

Third-quarter 2015 consolidated PRASM decreased 5.8 percent and consolidated yield decreased 5.6 percent compared to the third quarter of 2014. The declines in PRASM and yield were driven largely by a strong U.S. dollar, lower surcharges, travel reductions from corporate customers in the energy sector and softening in domestic yields. "Fourth-quarter pre-tax margin is expected to be between 9.5 and 11.5 percent, excluding special items," Hart added.

Passenger revenue for the third quarter of 2015 and period-to-period comparisons of related statistics for UAL's mainline and regional operations are included in the tables in the back of this document.   

Third-Quarter Costs

Total operating expense excluding special items was $8.3 billion in the third quarter, down 10.7 percent year-over-year. Including special charges, total operating expense was $8.4 billion, a 10.3 percent decrease year-over-year. The decrease was driven by lower oil prices and good non-fuel cost performance as a result of a strong U.S. dollar, improved operational performance and the company's Project Quality efficiency and quality initiative. Consolidated unit cost (CASM), excluding special charges, third-party business expenses, fuel and profit sharing decreased 1.5 percent compared to the third quarter of 2014. Consolidated CASM including those items decreased 12.1 percent year-over-year.

Liquidity and Capital Allocation

In the third quarter, UAL generated $1.3 billion in operating cash flow, $627 million in free cash flow, and ended the quarter with $6.9 billion in unrestricted liquidity, including $1.35 billion of undrawn commitments under its revolving credit facility. During the third quarter, the company continued to invest in its business through gross capital expenditures of approximately $716 million, excluding fully reimbursable projects. These investments include new aircraft purchases, aircraft refurbishments and investments in the company's hubs at New York/Newark, San Francisco, Houston and Chicago.

The company spent $230 million to complete its initial $1 billion share buyback program in the quarter and spent an additional $32 million toward its new $3 billion authorization, bringing the total returned to shareholders in the quarter to $262 million. 

UAL earned a 19.8 percent return on invested capital for the 12 months ended September 30, 2015.