AMERICAS: UAL’s net income jumps 75%

United Airlines parent UAL Corp. reported third-quarter net income of US$334 million, up 75.8 per cent from$190 million a year earlier. The carrier said it will continue to maintain “discipline in capacity planning” as it implements a five-year strategic plan that focuses on its “core business”. This includes the possible sale of noncore businesses such […]


United Airlines parent UAL Corp. reported third-quarter net income of US$334 million, up 75.8 per cent from$190 million a year earlier.

The carrier said it will continue to maintain “discipline in capacity planning” as it implements a five-year strategic plan that focuses on its “core business”. This includes the possible sale of noncore businesses such as its Mileage Plus frequent-flier program.

“US airlines have consistently destroyed value,” Chairman, President and CEO Glenn Tilton said according to an ATW report. “We have to take a different approach… to break the historic boom-and- bust cycle of this industry.”

Executive VP and Chief Revenue Officer John Tague said UA is deviating from the US airline industry’s “slavish belief in marginal economics” that causes carriers to increase capacity as demand rises, eroding pricing power.

UA plans to continue cutting domestic capacity, with North America capacity to be lowered 4.5-5.5 per cent in the fourth quarter and 3-4 per cent for full-year 2008. “We believe prudent capacity planning is critical to deal with shocks, which are inevitable in this business, as expected rather than as exceptions,” Tilton said.