OREANDA-NEWS. United Airlines (UAL) reported third-quarter 2015 financial results.

Third-Quarter Revenue and Capacity
For the third quarter of 2015, total revenue was USD 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 USD 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 USD 8.3 billion in the third quarter, down 10.7 percent year-over-year. Including special charges, total operating expense was USD 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 USD 1.3 billion in operating cash flow, USD 627 million in free cash flow, and ended the quarter with USD 6.9 billion in unrestricted liquidity, including USD 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 USD 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 USD 230 million to complete its initial USD 1 billion share buyback program in the quarter and spent an additional USD 32 million toward its new USD 3 billion authorization, bringing the total returned to shareholders in the quarter to USD 262 million.

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