United Airlines Q1 profit hits record $508 million; airline will speed up changes to fleet

DALLAS – Lower fuel prices helped United Airlines earn a record first-quarter profit despite a dip in revenue.

But the airline predicted that a key revenue figure will fall in the second quarter. And it will speed up changes to its fleet, including retiring more small planes.

United Continental Holdings Inc. said Thursday that first-quarter net income was a record $508 million, compared with a year-ago loss of $609 million.

Excluding items, United said it earned $1.52 per share. Analysts expected $1.44 per share, according to FactSet.

Revenue fell 1 per cent to $8.61 billion, close to analysts’ forecast of $8.60 billion.

The key, however, was a 36 per cent decline in spending on fuel, saving United more than $1 billion compared with the same quarter last year.

United and other airlines have held on to most of the savings from cheaper fuel _travel demand has been strong enough that they haven’t needed to cut fares.

United, the nation’s second-biggest airline company behind American when judged by passenger traffic, said that a key revenue figure _ revenue for every seat flown one mile _ will fall by 4 to 6 per cent in the second quarter. It blamed the strong U.S. dollar, which has hurt the value of tickets sold in other currencies, plus lower fuel surcharges and less travel by people in the energy industry.

The Chicago-based airline also announced a slew of changes to its fleet.

The company is speeding up the retirement of United Express 50-seat planes _ many passengers don’t like them anyway _ while it buys more used planes and extend the lives of others. And it will replace orders for 10 Boeing 787 jets with bigger Boeing 777s beginning in 2016. United was the first U.S. airline to get the 787, nicknamed the Dreamliner, a plane containing more lightweight carbon material for better fuel mileage.

United Continental shares were down $1.27, or 2 per cent, to $62.75 in trading before the opening bell. They ended Wednesday down 4 per cent in 2015.

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