Buoyed by a global rebound in travel, United and Continental airlines flew into the black during their last quarter as independent carriers.
United Continental Holdings Inc., the parent company created by the airlines’ Oct. 1 merger, reported that United’s net income soared to $473 million or $2.12 per share, excluding fuel and merger-related charges during the third quarter. That’s a $533 million improvement from 2009 results.
Continental reported a net income of $367 million, or $2.24 per share, for the quarter, an improvement of $365 million over prior-year results.
United and Continental will first report combined earnings for the fourth quarter of 2010 and aren’t expected to unveil many features that will shape customers’ experience on the merged carrier until early next year.
Like other U.S. carriers, they are benefiting from a new-found, and possibly short-lived, discipline in capacity. U.S. airlines have been slow to order new planes and cautious about add new routes as travel recovered from its 2009 swoon.
As a result, prices have soared this year, enabling carriers to post their strongest results in years. United’s consolidated passenger revenue rose 21.4 percent during the third quarter, while Continental saw a 20.6 percent gain.
Both carriers cater to business travelers and are poised to reap additional rewards as they knit together a global network that combines Continental’s long reach into Europe and Latin America, with United’s large Pacific network, analysts said.
That’s provided new United CEO Jeff Smisek can keep labor tensions in check and service at a high level until United and Continental gain a single operating certificate from the Federal Aviation Administration. The airline says its expects to reach that milestone by the end of 2011.
“We believe UAL is the best airline to own in a sector that should outperform the broader markets over the next twelve months, barring exogenous events” such as a fuel spike or terrorism strike, wrote analyst Hunter Keay of investment bank Stifel, Nicolaus and Co. in an Oct. 13 report.
jjohnsson@tribune.com
