United Continental says removing Boeing 787 from flight plans

CHICAGO, Fri Feb 22, 2013 — United Continental Holdings said on Thursday it was taking Boeing Co.’s grounded 787 Dreamliner out of its flying plans through June 5, except for a Denver-to-Tokyo route scheduled for a tentative launch in May.

United’s decision came as a Japanese investigation of a fuel leak on a Dreamliner operated by Japan Airlines Co. Ltd. indicated the cause to be a coating around the mechanism that controls fuel movement between tanks.

Japanese officials launched the investigation after two fuel leaks on the JAL 787, just days before authorities around the world grounded the new lightweight passenger jets over battery failures that sparked fires on two planes in January.

Japanese authorities still have not found the cause of the battery issue.

Airlines operating 787s are setting schedules for coming months while still uncertain about when the plane will be able to resume service following the fleet’s grounding five weeks ago.

Boeing is due to meet with the head of the U.S. Federal Aviation Administration on Friday to present measures designed to prevent further battery failures, a source told Reuters, even though the root cause of the electrical problem has not been determined.

United Continental says Sandy dented October revenue, profit

CHICAGO, Thu Nov 8, 2012 – United Continental Holdings, the world’s largest air carrier, said disruptions to operations including the cancellation of nearly 5,300 flights because of superstorm Sandy, reduced revenue and profit in October.

United, which operates a major hub at Newark Liberty International Airport in New Jersey, said in a statement late Wednesday that Sandy hurt revenue by about $90 million and profit by about $35 million in October.

The airline estimated that unit revenue, or passenger revenue per available seat mile, rose 0.5 percent to 1.5 percent last month compared with a year earlier. It said cancellations tied to Sandy improved unit revenue growth by about 1 percentage point.

Superstorm Sandy resulted in shutdowns at major New York-area airports and cancellations of more than 20,000 flights.

This week, another storm that brought snow and rain to the U.S. Northeast led airlines to cancel more than 2,000 flights for Wednesday and Thursday, according to the FlightAware.com tracking service. On Thursday, United and Delta Air Lines said their operations in the New York area were resuming as the region recovered from the latest storm.

Barclays airline analyst David Fintzen said he expects Sandy to hurt airline earnings by $150 million to $200 million collectively in the fourth quarter. This week, he raised fourth- quarter earnings estimates for most airlines he covers, citing relief from lower fuel prices.

“Fuel has actually come down enough that it more than offsets the actual earnings impact,” Fintzen said.

Delta has said Sandy hurt October revenue by $45 million and likely shaved about $20 million from October profit. New York-based JetBlue Airways said it expected “material” fourth-quarter effects from Sandy with short-term flight demand likely weakening as customers look to rebuild.

Shares of major airlines rose on Thursday, with United Continental gaining 2.1 percent to $20.96, and Delta up 2.3 percent at $10.17.

United to refresh fleet with $14.7 billion Boeing order

CHICAGO, Thu Jul 12, 2012 – United Continental Holdings Inc. said it will buy 100 Boeing 737 MAX 9 aircraft and fifty 737-900ER planes in a deal that Boeing valued at $14.7 billion at list prices.
United Continental, the holding company that owns United Airlines, the world’s largest carrier, said it will begin taking delivery of the 737 MAX 9 planes in 2018.
The 100 MAX aircraft order, first reported by Reuters in May, will allow United to replace older, less-efficient aircraft to reduce fuel and operating costs, the company said in a statement.
Boeing said the combined order will allow it to exceed 10,000 orders overall for the 737 family. The 737 MAX is a new-engine variant of Boeing’s Next-Generation 737.
The additional order for fifty 737s, which will be delivered from late 2013, reflects efforts by both Airbus and Boeing to maintain production of their current products and ensure a smooth transition to newer models from 2017.
United Continental said the 737-900ER models will replace older, less-efficient Boeing 757-200 aircraft flown domestically.
The new models are expected to burn up to 15 percent less fuel per seat than the aircraft they replace, the company said.
The new set of orders takes United’s order book — anticipated through 2022 — to 272, including 50 Boeing 787 Dreamliners, the airline said.
United Continental will be the first North American carrier to fly the much-awaited light-weight, carbon-composite widebody Dreamliner.

United Continental shares off on revenue concerns

CHICAGO ― Shares of United Continental Holdings fell about 7 percent on Friday as some analysts cut their fourth-quarter profit estimates, citing weaker-than-expected revenue.

United Continental said in a U.S. regulatory filing late on Thursday that it expects consolidated passenger revenue per available seat mile, an important measure called unit revenue, to rise 8.5 percent to 9.5 percent in the fourth quarter.

Helane Becker, an analyst with Dahlman Rose & Co, said her firm had estimated 10 percent growth in quarterly unit revenue.

“We think there are concerns about a recession in Europe,” Becker said in an email. Dahlman Rose cut its fourth-quarter profit estimate for United Continental to 25 cents a share from 50 cents a share to account for lower capacity and traffic.

Becker said United would likely benefit in Chicago, Los Angeles and the Atlantic from the restructuring of AMR Corp’s. American Airlines, which filed for Chapter 11 protection last month.

James Higgins, an analyst with Ticonderoga Securities, reduced his fourth-quarter profit estimate on United Continental to 16 cents a share from 43 cents a share. Analysts on average, currently expect 46 cents a share, according to Thomson Reuters I/B/E/S.

In a note to clients, Higgins said exposure to mainland Asia revenue could be creating more revenue uncertainty for United than for other airlines.

“We like the carrier’s longer-term prospects but are a bit wary of near-term revenue trends,” Higgins wrote.

Most U.S. airlines have posted profits this year, aided by service cuts, higher fares and retirement of less fuel-efficient planes. Still, economic woes loom as a threat to overall demand for air travel.

Last week, Delta Air Lines Inc. said it expects recessionary effects from the euro-zone crisis to weigh on 2012 and said it would cut capacity in Europe by 7 percent.

Shares of United Continental were off 6.7 percent at $18.91 in morning trading as Delta and US Airways Group also fell. The Arca Airline index was down 2 percent. AMR Corp was up 4.3 percent to about 60 cents and Southwest Airlines rose 0.4 percent to $8.43.

United, US Airways manage profits despite fuel rally

CHICAGO ― United Continental Holdings and its rival U.S. Airways Group on Thursday said their quarterly profits were battered by soaring fuel costs, but travel demand appears to be robust, undeterred by gathering economic threats.

The third-quarter results conclude the earnings season on a mostly positive note for major U.S. airlines and reflect a newfound ability to manage capacity, one analyst said.

United Continental’s shares fell nearly 2 percent to $19.94 on the New York Stock Exchange after its profit came in below forecasts. US Airways’ profit beat forecasts and its shares gained 2.1 percent to $5.78 in morning trading.

“There’s no signs of weakness yet,” said Helane Becker, an analyst with Dahlman Rose & Co. “What you’re seeing across the board for the group in general is pretty positive.”The airline industry is on the mend after a decade-long downturn that sent several carriers into bankruptcy. But even as soaring fuel costs and economic gloom threaten to disrupt the recovery, carriers have managed the plight effectively by cutting the number of seats they sell when times get rough.

Airline analysts had been on the lookout for signs of weakness in travel demand in the fourth quarter and in 2012. But those signs have yet to materialize.

“Looking forward, we see continued strong demand in the fourth quarter,” U.S. Airways Chief Executive Doug Parker said in a statement.

United Continental, in a regulatory filing on Thursday, said its advance bookings for the next six weeks were up 3.2 percentage points from the same period a year ago on domestic routes and down half of a percentage point on international routes.

The sentiments echo those voiced recently by Delta Air Lines and Southwest Airlines.