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United Continental posts $840 million 2011 profit

United Continental posts $840 million 2011 profit

By Aaron Karp | January 27, 2012

7
United Airlines 747. Courtesy, Boeing

The good news continued Thursday for the US airline industry as United Continental Holdings (UCH), parent of merger partners United Airlines (UA) and Continental Airlines (CO), reported 2011 net income of $840 million.

That was down 12% from a pro forma net profit of $955 million in 2010, but the impressive result is another sign that US airlines have been able to mostly offset steep rises in fuel costs with robust revenue performances and capacity discipline. UCH's full-year 2011 revenue grew 8.8% year-over-year on a pro forma basis to $37.11 billion while expenses lifted 9.6% to $35.29 billion, producing an operating profit of $1.82 billion, down 5.1%. The company's full-year 2011 aircraft fuel costs increased by 29.5% to $12.38 billion.

President and CEO Jeff Smisek said that "2012 is the year we will become one airline" with 75% of expected merger synergies achieved by year end. The airline plans to put five Boeing 787s into service in the second half of 2012 and this year will take delivery of 19 737-900ERs.

CFO Zane Rowe said UCH achieved $400 million in merger synergies in 2011, slightly more than expected. The synergies were comprised of $250 million in enhanced revenue and $150 million in cost savings.

UCH did incur a fourth-quarter net loss of $138 million owing mostly to special charges of around $170 million related to the integration of UA and CO. The loss was narrowed from a pro forma net deficit of $325 million in the 2010 December quarter.

UCH's full-year 2011 mainline traffic decreased by 1.5% year-over-year on a pro forma basis to 181.76 billion RPMs. Capacity was down 0.3% to 219.44 billion ASMs and load factor was 82.8%, down 1.1 points. Passenger yield rose 10.4% to 14.29 cents.

Discuss this news 7

26 Jan20:44

United boasts of this profit

By Tobias

United boasts of this profit as if it has achieved the moon and at what cost? For years it's employees suffered the consequences of mis-management loosing their jobs, pensions, livelihood and homes not just in the US but around the world. Shame on this airline for destroying the lives of it's hard working employees.

26 Jan22:33

How much of that is CO's, and

By Anonymous

How much of that is CO's, and how much was UA's contribution?

27 Jan09:35

Does it really matter if most

By Anonymous

Does it really matter if most of it came from old UA or old CO? It's all one company now.

27 Jan10:26

@Anonymous: The whole point

By GPaisley

@Anonymous: The whole point of this (or really any) merger is that the whole is greater than the sum of the parts. It's deliberately irrelevant which subsidiary contributed what to the total profit. In fact, it would require a lot of (pointless) cost allocations since most management/overhead costs are now consolidated.

27 Jan11:52

Having worked for UAL from

By JAP

Having worked for UAL from the 90's, I know from experience it was the union's. 9-11 or management did not send UAL into bankruptcy it was the pilots union in 2000. We lost more customers during their summer of fun than from any other reason. Check the books for the years.

27 Jan16:23

It sure has been a tough road

By Lokel Yokel

It sure has been a tough road as a junior pilot for United. Hired in 1999 I've been furloughed twice. We've watched our retirement, benefits, pay and work rules go down the tubes. I sure hope that a day will come soon when we can make a decent living again and have some job security to look forward to.

27 Jan18:19

I just want to

By Jet7

I just want to say...ENOUGH...the past is the past we cant change that...but the future is looking bright...if anything the New United will be a wonderful place to work when all the pieces are in place..we must support one another and make OUR MERGER WORK...being a former Pan American flight attendant to have watched my company die..was extremely painful...I made a vow to never look back but to continue to look forward and make things work instead of complaining...we all have choices in life...this is the choice....do you wake up everyday and say something bad is going to happen? or do you wake up and say...todays a new day with new beginnings and challenges and except those challenges and move forward and make it work?....I prefer the latter...learn from the past but keep moving forward and strive for a better tomorrow...the airline industry is littered with defunct airlines...but here at the New United...the combination of 2 historic airlines will naturally go through is growing and merging pains...but I assure the wonderful people we have working here will make our company the premier company it is meant to be..so stay tuned..the best is yet to come!....and no I didnt drink the cool aid...Ive been in this industry for 32 years...and realize everyday change is inevitable you cant stop it...so enjoy the ride....and dont get upset over things you cant change or have control over....FOR REAL...besides..it keeps you young...less stress...lolol

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