Airlines - except United - post profits

The exception to Thursday's reports: United, with Continental, which lost $489 million after weather-related cancellations.
The exception to Thursday's reports: United, with Continental, which lost $489 million after weather-related cancellations. (REUTERS)
Posted: April 26, 2014

Although the severe winter led to thousands of flight cancellations, American Airlines and Southwest Airlines reported record first-quarter profits that beat analysts' expectations.

JetBlue Airways eked out a profit in what is the seasonally weakest period for airlines. United Airlines posted a loss.

All the airlines said the outlook for spring and summer was good.

American and US Airways, whose merger created the world's largest airline, posted a net profit of $480 million. As separate companies, American, which was in Chapter 11 bankruptcy, and US Airways lost a combined total of $297 million a year ago.

The profit was helped by the sale of takeoff and landing slots at Washington's Reagan National Airport, which the Justice Department required to settle an antitrust lawsuit against the merger.

Excluding special items, the combined US Airways-American would have earned $402 million, or 54 cents a share, beating analysts' estimates of 48 cents per share. Revenue rose 5.6 percent to $10 billion.

"In the entire history of American Airlines, we have never earned $400 million in the first three months of a year, but in the first three months since the merger, we did," American chief executive officer Doug Parker told employees. American Airlines Group Inc. is Philadelphia's dominant airline.

Southwest reported a higher quarterly profit, based on lower fuel costs and higher passenger revenue. Net income was $152 million, or 22 cents a share, including $26 million in special items, compared with $59 million, or 8 cents a share, a year earlier. Revenue rose 2 percent to $4.2 billion.

"Demand was very strong and very steady, and resilient," said Southwest chief executive officer Gary Kelly. "The bad weather definitely cost us, but we still managed to stay on plan."

United lost $489 million, or $1.33 a share, excluding $120 million in special items. Revenue declined 0.3 percent to $8.7 billion.

United said the historic severe weather cost the airline $200 million and weather-related cancellations added a 2 percent drop to revenue as calculated for each mile passengers flew, a key industry measure.

"Our financial performance in the first quarter was disappointing," said United CEO Jeff Smisek. "We know we can do better and we are taking actions to do just that."

JetBlue earned $4 million, or 1 cent per share, compared with $14 million, or 5 cents per share, a year earlier.

JetBlue, which began flights to Boston from Philadelphia last May, said despite the harsh winter - 80 percent of JetBlue flights are in the Northeast - first-quarter revenues increased 3.8 percent, to $1.3 billion, over a year ago.

"We're enthused about the future," said JetBlue CEO David Barger. "We are confident in our plans to focus on cost control, maximizing revenue, and strengthening the balance sheet."

Delta Air Lines on Wednesday reported a quarterly profit of $213 million, or 25 cents per share, up from $7 million, or 1 cent per share, a year earlier.


lloyd@phillynews.com

215-854-2831

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