UAL flies back into profit zone after six years

NEW YORK: UAL, the parent of United Airlines, on Monday posted a second-quarter profit, its first since ’00, helped by strong revenue and cost cuts. UAL last week disclosed preliminary second-quarter results, saying its profit would be more than double Wall Street estimates.

The No 2 US carrier, which emerged from bankruptcy in February, said Monday that profit amounted to $119m, or 93 cents per share, reversing a loss in the second quarter of ’05. Excluding one-time severance charges of $22m, earnings per share were $1.09.

Operating revenues rose 16% to $5.11bn on fuller plans and higher fares. Cost cutting and robust travel demand more than offset a 31% rise in fuel costs. UAL said it earned 0.6 cents per seat mile, compared with 0.29 cents per seat mile a year earlier.

UAL said it generated operating cash flow of nearly $700m in the quarter, increasing its cash and short-term investments by $500m to $5.1bn.

Jake Brace, UAL’s chief financial officer, said in a statement that the airline aims to accelerate cost cutting. He said the company intends to bring forward some of the $400m in savings planned for ’07 to this year.