A Slowdown in Traffic Affects United Airlines
UAL announced it reached an agreement to acquire 40 new Boeing 737-700 aircraft which will enter the fleet beginning in mid-2017, replacing a portion of the capacity currently operated by regional partners.
«We improved our operational performance, continued to invest in our products and services and achieved record financial performance,»said Brett J. Hart, UAL‘s acting chief executive officer. «We have great momentum as we head into 2016 and are committed to continuously earning the trust of our customers and employees. I’m proud of what we accomplished together, running a reliable airline and making the right investments to deliver shareholder value. We expect first-quarter pre-tax margin to be between 8 and 10 percent, excluding special items.»
For the fourth quarter of 2015, total revenue was $9.0 billion, a decrease of 3.0 percent year-over-year. Fourth-quarter 2015 consolidated PRASM decreased 6.0 percent and consolidated yield decreased 7.2 percent compared to the fourth quarter of 2014. For the full-year 2015, consolidated PRASM declined 4.4 percent versus the prior year. The declines in PRASM and yield were driven largely by a strong U.S. dollar, lower surcharges, travel reductions from customers impacted by declining oil prices and softening domestic and international yields.
UAL reported full-year net income of $4.5 billion, or $11.88 per diluted share, excluding special items. Including special items, UAL reported full-year net income of $7.3 billion. These results include a nonrecurring $3.1 billionnon-cash benefit associated with the reversal of the company’s income tax valuation allowance.
UAL announced it would take delivery of 40 new Boeing 737-700 aircraft, which will enter the fleet beginning in mid-2017. These aircraft will replace a portion of the capacity currently operated by the company’s regional partners, as the company expects to reduce by more than half the number of 50-seat aircraft in its fleet by 2019.
«Our customers have a preference for an improved travel experience, including first class seats, Economy Plus, and Wi-Fi. These aircraft are an efficient way to meet those needs while reducing 50-seat flying,» said Gerry Laderman, UAL’s acting chief financial officer.