United Blames First Quarter Losses on Winter Weather

Skift Take

Everyone knows that United’s losses are about more than bad weather.

— Jason Clampet

United Continental Holdings Inc.’s first-quarter loss widened as the airline pegged the toll of severe winter weather at $200 million.

The loss of $489 million, or $1.33 a share, excluding some items, expanded from a loss of $358 million, or $1.08, a year earlier, Chicago-based United said today. That was narrower than the $1.36 average of 16 estimates compiled by Bloomberg. Sales fell 0.3 percent to $8.7 billion.

Snow, ice and cold temperatures last quarter added to United’s struggles since the company’s creation in a 2010 merger with Continental Airlines. United, now working to cut $2 billion in annual costs by 2017, is the only major U.S. carrier for which analysts projected a quarterly loss.

“This quarter’s financial performance is well below what we can and should achieve,” Chief Executive Officer Jeff Smisek said in a statement. “We are taking the appropriate steps with our operations, network, service and product to deliver significantly better financial results.”

A series of storms pummeled central and Eastern U.S. in January and February, primarily affecting United hubs in Chicago and Newark, New Jersey. The airline was forced to ground 35,000 flights, reducing the number of passengers flown by 1.4 percent.

UAL Chart

UAL data by YCharts

Revenue also was damped as Chinese competitors added capacity on routes to the U.S., forcing fares lower, and by the weakening of the Japanese yen, which affected demand. United is the biggest U.S.-based airline on flights to Asia.

Today’s airline earnings will round out reports from the largest U.S. carriers, after Delta Air Lines Inc. posted a profit yesterday that exceeded analysts’ estimates. Also releasing results today are American Airlines Group Inc., Southwest Airlines Co. and JetBlue Airways Corp.

To contact the reporters on this story: Julie Johnsson in Chicago at [email protected]; Mary Schlangenstein in Dallas at [email protected] To contact the editors responsible for this story: Ed Dufner at [email protected]

Destination Mexico: The Evolution of Luxury Travel

Luxury travelers are looking for more than just posh accommodations and generic pampering. Savvy suppliers and tourism organizations are capitalizing on the desire for authentic experiences, as the sharing economy continues to present new ways to connect travelers with local culture.

Read More

Next Story