- The Washington Times - Tuesday, October 31, 2006

United Airlines parent UAL Corp. yesterday reported third-quarter net income of $190 million, its second consecutive profitable quarter since emerging from bankruptcy protection earlier this year.

UAL’s net income for the three months that ended Sept. 30 amounted to $1.30 per share, compared with a loss of $1.77 billion ($15.26 per share) a year ago, when the company was nearing the end of its three-year bankruptcy restructuring.

The Elk Grove Village, Ill., company also posted a profit of $119 million in the second quarter, its first true profit since 2000.

“It looks like [United] is really back in the ballgame,” said analyst Ray Neidl of Calyon Securities Inc. in New York. “They’ve still got some work left to do on the cost side, but then again, so do American, Continental and other carriers.”

More passengers, higher fares and lower costs helped keep the nation’s No. 2 carrier profitable despite fuel costs that are higher than last year.

United Chief Executive Officer Glenn Tilton told employees in a conference call yesterday that improvements to the airline’s network have enabled the carrier to turn around planes more quickly at airports and add flights, such as service from Washington Dulles International Airport to Kuwait and Narita, Japan, that began last month.

The airline’s financial stability hinges on its ability to cut costs, Mr. Tilton said.

“We are on track with our current saving initiatives, which call for $300 million in cost reductions this year and $400 million in 2007,” he said.

Not all U.S. carriers were as fortunate, as Northwest Airlines yesterday posted a $1.2 billion loss in the third quarter. The results included a net loss of $337 million for September alone.

Northwest’s loss of $13.50 per share compared with a loss of $475 million ($5.45) during the like period last year, when it filed for bankruptcy protection.

The Eagan, Minn., airline said it recorded $1.43 billion in bankruptcy-related charges in the quarter, including costs for rejecting airplane leases, pension expenses and fees related to its reorganization.

Northwest, the nation’s fifth-largest airline, said it still expects a “modest profit” for all of 2006 on $12 billion in revenue, not counting reorganization expenses. The airline said it plans to exit Chapter 11 in the first half of 2007.

“We have been able to stop the losses of the past six years that totaled $4.2 billion,” Northwest Chief Executive Doug Steenland said. “However, our September loss indicates that we still have work to do in order to reach our goal of sustained profitability.”

• This article was based in part on wire service reports.


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