United Airlines Parent Reports Record Third-Quarter Earnings

CHICAGO (AP) -- UAL Corp., the parent of United Airlines and Shuttle by United, reported a 31 percent increase in third-quarter profits a...

CHICAGO (AP) -- UAL Corp., the parent of United Airlines and Shuttle by United, reported a 31 percent increase in third-quarter profits as higher ticket prices and more passengers offset higher fuel costs.

For the three months ended Sept. 30, earnings rose to $437 million, or $3.29 a share fully distributed, up from $334 million, or $2.53 a share, for the same period a year earlier.

The fully-distributed basis assumes costs if stocks were distributed to employee owners of the company.

The earnings were in line with analysts expectations. UAL stock rose $1.12 1/2 in trading Tuesday on the New York Stock Exchange to $45.62 1/2 a share.

UAL took $61 million in charges in the quarter to repay debt, replace aircraft seats and settle a lawsuit against commission caps brought by travel agents. Excluding the charges, earnings rose 42 percent to $474 million, or $3.58 a share.

The carrier, based in the Chicago suburb of Elk Grove Village, said revenues rose 8.7 percent to $4.49 billion from $4.13 billion. It said 75.4 percent of its seats were filled during the quarter, up 1.7 percentage points over a year ago.

September bookings increased over July and August despite rising ticket prices. Many passengers were the higher-paying business and first-class customers UAL is targeting, said Gerald Greenwald, UAL chairman and chief executive.

The gains helped United and Shuttle by United overcome rising fuel costs, which was 22 percent higher than a year ago. Since the end of July, jet fuel has risen to about 80 cents a gallon from 60 cents.

United is already $350 million over its 1996 fuel budget, said spokesman Joe Hopkins. The company is trying to reduce weight on planes to save fuel, he said.

For the first nine months of the year, net income rose nearly 35 percent to $819 million, or $5.98 a share, from $607 million, or $4.89 a share. Excluding the earlier charges, earnings were $885 million, or $6.64 a share.

Revenues rose 9.8 percent to $12.39 billion from $11.28 billion for the first nine months.

The airline industry in general has been reporting strong third-quarter results. In recent days, USAir Group Inc. said profits rose 57 percent in the quarter, while American Airlines' parent company said its profits increased 23 percent. Northwest Airlines said third-quarter profits rose 9.9 percent.

Absent a one-time charge to replace aircraft, Continental's earnings rose increased 55 percent before taxes.

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