United Airlines’ rocky recovery from its past six years of financial struggles appeared to take hold in the second quarter, with the carrier reporting a $274 million profit, more than double from $119 million a year earlier.
United Airlines parent UAL Corp. has been focusing on a strategy of international growth and controlling costs.
The company’s financial troubles started years ago, before Sept. 11, 2001. United’s troubles continued through its Chapter 11 bankruptcy that lasted from December 2002 through early 2006. Even after some recovery last year, United lost $61 million in the fourth quarter of 2006, hit by December snowstorms in Denver and Chicago, and then lost $152 million in the first quarter of 2007.
In the seasonally strong second quarter of this year, United had its the highest second-quarter net income in seven years. The profit came to $2.31 in earnings per share, or $1.83 in diluted earnings per share. That’s up from $1.01 per share in the second quarter of 2006, or 93 cents per diluted share in that period.
But the financial results added fuel to disagreements between United and some of its labor unions. Employees took large pay cuts and lost United pension benefits during the bankruptcy, and some have asked to reopen contracts to increase compensation.
“Profit must be invested in the employees,” said Greg Davidowitch, who leads the Association of Flight Attendants at United, in a written statement Tuesday. “It’s time now that we share in the rewards of our airline.”
UAL’s operating revenues came to $5.2 billion in the quarter ended June 30, up 2 percent from about $5.1 billion in the year-ago quarter. United moved to reduce domestic capacity earlier this year in response to weakening domestic yields.
“By acting decisively to reduce domestic capacity early on and continuing to execute on our international growth strategy, we stabilized our U.S. performance and are outperforming the industry internationally,” John Tague, United’s chief revenue officer, said in a written statement.
United is the largest carrier at Denver International Airport.
Denver has been a “much more competitive environment” in the last year, but United’s revenue performance in Denver has stabilized, Tague said.
Staff writer Kelly Yamanouchi can be reached at 303-954-1488 or kyamanouchi@ .
