Blue skies for UAL as chief sees upturn
UAL, the company which owns US airline United Airlines, reported a slump in traffic and earnings yesterday, but said it was beginning to see signs that business travel could soon improve.
The number of passengers flying with the carrier fell 2.9 per cent for the third quarter, it said, while revenue slumped 20.3 per cent to $4.43bn (£2.22bn).
“There’s no opportunity here for a full revenue recovery until we get premium cabin pricing back,” said group president John Tague.
“But we are seeing progress, which is quite encouraging from where we were just three, four, five months ago,” he added.
Airlines around the world have been floundering as demand for premium seating – or first and business class – slumps on the back of big companies reigning in their spending.
United Airlines is particularly geared towards business travel, so the downturn has been a huge blow. Carriers have been forced to slash the price of premium seats in an attempt to win back demand, but will need to put prices back up eventually.
UAL lost $57m during the quarter, equal to 93 cents per share.
Not including fuel hedges and issues related to accounting, the group said the loss equals 43 cents per share – beating the 94 cents expected by analysts.
However, this third-quarter loss also was much smaller than the $792m loss during the same period last year that was driven by accounting for fuel hedges.
United also reduced flying by 8.2 per cent compared to the same period last year.