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Operating Margin Improvement Despite 33% Higher Fuel Expense CHICAGO, May 8 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, today reported its combined first quarter 2006 financial results. UAL reported combined first quarter net income of $23 billion driven by $23 billion of primarily non-cash reorganization gains largely due to the discharge of liabilities associated with the company's exit from Chapter 11. The company believes a better indicator of UAL's post-reorganization financial performance is its results excluding reorganization items. Excluding reorganization items, UAL reported a net loss for the combined quarter of $306 million, compared to a loss of $302 million a year ago. On an operating basis, UAL reported a combined first quarter operating loss of $171 million, a $79 million improvement over the same quarter last year, as strong revenue more than offset a $314 million increase in fuel expense for mainline and regional operations. "The $23 billion gain is a reflection of the magnitude and effectiveness of our restructuring. We are now applying the same rigor and discipline to improving our operating and financial performance," said Glenn Tilton, UAL's chairman, president and CEO. "By simultaneously reducing our costs and realizing our full revenue potential, we will drive continued margin improvement and unlock the full value of our assets." The company ended the quarter with an unrestricted cash balance of $3.6 billion, and a restricted cash balance of $0.9 billion, for a total cash balance of $4.5 billion. Unrestricted cash and short-term investments increased by $1.8 billion during the quarter as the company drew down $2.8 billion of exit financing. UAL generated positive operating cash flow of over $400 million. The contribution of regional affiliates improved by $94 million compared with last year's quarter, as a result of restructured regional carrier agreements, the company's network optimization efforts and the strong revenue environment. Regional affiliates revenue increased by 28 percent. Regional affiliates expense increased by only 8 percent, despite a 13 percent increase in capacity and 36 percent increase in fuel expense. The company had an effective tax rate of zero for all periods presented, which makes UAL's pre-tax results the same as its net results. EBITDAR excluding the non-cash stock based compensation expense is on track with the business plan. "The improved revenue environment essentially compensated for record high fuel expense," said Jake Brace, UAL executive vice president and chief financial officer. "With limited near-term debt maturities, modest capital spending and no near-term aircraft commitments, the company is on a solid financial footing." Revenue Results Compared to the same quarter last year, total revenue increased by 14 percent, with mainline revenue per available seat mile (RASM) up 11 percent. Strong demand, industry capacity restraint, yield improvements and our differentiated customer product strategy all contributed to the revenue increase. Mainline traffic increased by 3 percent on a 1 percent increase in capacity, resulting in a 1 point increase in load factor. Mainline yield was 9 percent higher than last year. Domestic, Pacific and Atlantic regions all posted strong unit revenue increases. Regional affiliate passenger unit revenue was 13 percent higher than last year driven by a 9 percent increase in yield and a 3 point increase in load factor. "In addition to an improved pricing environment, the strength of our network and our evolving differentiated product strategy contributed to revenue improvement," said John Tague, UAL executive vice president and chief revenue officer. "While these revenue results are encouraging, they do not meet our expectations or reflect the full potential of this airline. The work to get there is clear and we continue to aggressively execute our plan." Operating Expenses During the combined first quarter, total operating expenses increased 11 percent. Mainline operating cost per available seat mile (CASM) increased by 11 percent from the year-ago quarter, primarily driven by a 33 percent increase in mainline fuel prices. Excluding fuel, mainline CASM increased 3 percent. Combined first quarter results also reflected an increase of $51 million or 5% in salaries and related expense, which included the recognition of $69 million for stock-based compensation expense for plans implemented in accordance with the company's Plan of Reorganization. Purchased services expense increased $69 million, or 19 percent compared with last year, driven primarily by an increase in outsourcing, higher traffic-related costs and post-bankruptcy professional fees. Aircraft maintenance materials and outside repairs increased $40 million or 18 percent primarily due to engine-related maintenance. The company is engaged in a multi-year cost reduction program. For 2006, United's business plan includes $300 million in benefits over 2005. The company has committed to an additional $400 million in cost savings starting in 2007 over and above what is in the business plan. "While partially driven by fresh-start accounting and the non-cash charge for stock based compensation expense, our increase in non-fuel CASM reinforces why our focus remains on our core operations and why we are targeting additional cost savings in 2007," Brace said. To generate additional cost savings in 2007 and beyond, the company is focused on fundamental improvements to its core business. As part of United's ongoing continuous improvement efforts, the company is improving processes and driving efficiencies that will enhance service to customers and reduce costs. Savings will come from improvements in both major processes, such as flight planning to reduce navigation fees, and smaller processes, such as the consolidation of technology help desks. In addition, the company will streamline operations and corporate functions to further reduce overhead spending for salaried and management personnel. United also expects to reduce marketing and sales expenses. These cost-savings efforts build on the company's accomplishments during the restructuring. For example, the cargo division implemented market management processes, invested in information systems, and outsourced warehouses and call centers which improved customer service and profitability. The company is making targeted investments in people, tools and technology infrastructure. These investments will support the extension of continuous improvement efforts to the major work processes that support the company and the customer. United expects consistent delivery of its services to improve the customer experience. "We are committed to ongoing expense reduction, and the savings programs will mitigate the inflationary cost pressure we face in 2006 and 2007," said Pete McDonald, UAL executive vice president and chief operating officer. "We are driving consistency and standardization to improve results, and are focused on achieving our cost objectives while restoring the high levels of operational performance posted in 2005." Operations The company continues to implement its resource optimization efforts throughout the United system, resulting in an increase in first quarter fleet utilization of 3 percent. The company intends to further tighten turn times at Dulles and O'Hare this year. By closing remote terminals in Los Angeles, San Francisco, and Washington Dulles, the company has eliminated the need to bus passengers between terminals in the entire United system. In addition, employee productivity (available seat miles divided by employee equivalents) was up 6 percent for the quarter compared to the same period in 2005. In the most recent data available from the U.S. Department of Transportation, United was ranked second for the 12 months ending March 2006 in on-time arrival performance and ranked second in the least mishandled baggage among the six major network carriers. Poor west coast weather, record high load factors and tighter turn times put pressure on United's operational performance in the first quarter. For the first quarter 2006, United was ranked sixth in on-time arrival performance and ranked second in the least mishandled baggage among the six major network carriers. Fresh-Start Reporting Upon emergence from its Chapter 11 proceedings in February 2006, the company adopted fresh-start reporting in accordance with SOP 90-7 as of February 1, 2006. The company's emergence resulted in a new reporting entity with no retained earnings or accumulated deficit as of February 1, 2006. Accordingly, the company's financial information shown for periods prior to February 1, 2006 is not comparable to consolidated financial statements presented on or after February 1, 2006. For further discussion on fresh-start reporting, please refer to the company's first quarter 2006 Form 10-Q to be filed with the Securities and Exchange Commission. Outlook
United has issued the following capacity guidance for the second quarter
and full-year 2006:
Capacity (ASM's) Second Quarter Full Year
Mainline +2.5% to 3.0% +2.5% to 3.0%
Regional Affiliates +8.0% to 9.0% +8.0% to 9.0%
Consolidated +3.0% to 3.5% +3.0% to 3.5%
Capacity increases are driven by higher aircraft utilization as a result of the company's resource optimization efforts. The company expects mainline fuel price to average $2.15 per gallon for the second quarter and $2.06 per gallon for the full year (including taxes). The company currently has no fuel hedges in place for the remainder of 2006. Excluding fuel, mainline CASM is expected to be up 3 to 4 percent in the second quarter over the same period last year. News releases and other information about United Airlines can be found at the company's website, http://www.united.com. Note 8 to the attached Combined Statements of Consolidated Operations provides a reconciliation of net income or loss reported under GAAP to net income or loss excluding reorganization items for all periods presented, as well as a reconciliation of other financial measures, including and excluding special items. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements included in this press release are forward- looking and thus reflect the Company's current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks and uncertainties relating to the operations and business environments of the Company that may cause actual results to differ materially from any future results expressed or implied in such forward-looking statements. Factors that could significantly affect net earnings, revenues, expenses, costs, load factor and capacity include, without limitation, the following: the Company's ability to comply with the terms of its credit facility; the costs and availability of financing; the Company's ability to execute its business plan; the Company's ability to attract, motivate and/or retain key employees; the Company's ability to attract and retain customers; demand for transportation in the markets in which the Company operates; general economic conditions (including interest rates, foreign currency exchange rates, crude oil prices and refining capacity in relevant markets); the effects of any hostilities or act of war or any terrorist attack; the ability of other air carriers with whom the Company has alliances or partnerships to provide the services contemplated by the respective arrangements with such carriers; the costs and availability of aircraft insurance; the costs of aviation fuel; our ability to cost effectively hedge against increases in the price of aviation fuel; the costs associated with security measures and practices; labor costs; competitive pressures on pricing (particularly from lower-cost competitors) and on demand; capacity decisions of our competitors, U.S. or foreign governmental legislation, and regulation and other actions; the ability of the Company to maintain satisfactory labor relations, any disruptions to operations due to any potential actions by our labor groups ; weather conditions; and other risks and uncertainties set forth from time to time in UAL's reports to the United States Securities and Exchange Commission. Consequently, the forward-looking statements should not be regarded as representations or warranties by the Company that such matters will be realized. The Company disclaims any intent or obligation to update or revise any of the forward-looking statements, whether in response to new information, unforeseen events, changed circumstances or otherwise.
UAL CORPORATION AND SUBSIDIARY COMPANIES
COMBINED SUCCESSOR AND PREDECESSOR COMPANY STATEMENTS OF CONSOLIDATED
OPERATIONS (UNAUDITED)
(In millions, except per share)
Predecessor Successor Predecessor
Period Period
from from Combined Three
January 1 February 1 Periods Months
to to Ended Ended
January March March March %
31, 31, 31, 31, Increase/
(In accordance with GAAP) 2006 2006 2006 2005 (Decrease)
Operating revenues:
Passenger
- United Airlines $1,074 $2,182 $3,256 $2,916 11.7
- Regional
Affiliates 204 465 669 524 27.7
Cargo 56 124 180 172 4.7
Other operating revenues 124 236 360 303 18.8[5]
1,458 3,007 4,465 3,915 14.0
Operating expenses:
Salaries and related costs 358 726 1,084 1,033 4.9
Aircraft fuel 362 705 1,067 805 32.5[6]
Regional affiliates 228 468 696 645 7.9
Purchased services 134 296 430 361 19.1
Aircraft maintenance
materials and outside
repairs 80 179 259 219 18.3
Landing fees and other rent 75 145 220 233 (5.6)
Depreciation and
amortization 68 148 216 213 1.4
Cost of sales 65 128 193 143 35.0[5]
Aircraft rent 30 75 105 120 (12.5)
Commissions 24 51 75 77 (2.6)
Other operating expenses 86 205 291 316 (7.9)
1,510 3,126 4,636 4,165 11.3
Loss from operations (52) (119) (171) (250) (31.6)
Other income (expense):
Interest expense (42) (141) (183) (109) 67.9
Interest capitalized - 3 3 (5) -
Interest income 6 28 34 4 750.0
Miscellaneous, net - 6 6 58 (89.7)
(36) (104) (140) (52) 169.2
Loss before reorganization
items, income taxes and
equity in earnings of
affiliates (88) (223) (311) (302) 3.0
Reorganization items, net 22,934 - 22,934 (768) -[3]
Earnings (loss) before income
taxes and equity in earnings
of affiliates 22,846 (223) 22,623 (1,070) -
Income taxes - - - - -
Earnings (loss) before equity
in earnings of affiliates 22,846 (223) 22,623 (1,070) -
Equity in earnings of
affiliates 5 - 5 - -
Net income (loss) $22,851 $(223) $22,628 $(1,070) -
Earnings (loss) per share,
basic and diluted $196.61 $(1.95) $(9.23)
Weighted average shares 116.2 115.1 116.2
See accompanying notes.
Consolidated Notes (Unaudited)
(1) UAL Corporation ("UAL" or the "Company") is a holding company whose
principal subsidiary is United Air Lines, Inc. ("United"). On
December 9, 2002, UAL, United and twenty-six direct and indirect
wholly owned subsidiaries filed Chapter 11 petitions for relief in the
U.S. Bankruptcy Court for the Northern District of Illinois. On
February 1, 2006, the Company emerged from Chapter 11.
(2) In connection with emergence from Chapter 11 bankruptcy protection,
the Company adopted fresh-start reporting in accordance with American
Institute of Certified Public Accountants' Statement of Position 90-7
"Financial Reporting by Entities in Reorganization under the
Bankruptcy Code". Thus, the consolidated financial statements prior
to February 1, 2006 reflect results based upon the historical cost
basis of the Company while the post-emergence consolidated financial
statements reflect the new basis of accounting incorporating the fair
value adjustments made in recording the effects of fresh-start
reporting. Therefore, the post-emergence periods are not comparable
to the pre-emergence periods. However, for discussions on the results
of operations, the Company has combined the results for the one month
ended January 31, 2006 and two months ended March 31, 2006. The
combined periods have been compared to the three months ended March
31, 2005. References to "Successor Company" refer to UAL on or after
February 1, 2006, after giving effect to the application of fresh-
start reporting. References to "Predecessor Company" refer to UAL
prior to February 1, 2006.
Pursuant to SEC Regulation G, the Company included on the face of the
Combined Successor and Predecessor Company Statements of Consolidated
Operations (Unaudited) for the three month period ending March 31,
2006 a reconciliation of reported GAAP financial results to financial
results reported on a non-GAAP basis. The Company believes that the
reported non-GAAP financial results provide management and investors a
better perspective of the Company's core business and on-going
operational financial performance and trends for comparative purposes.
(3) In connection with its bankruptcy proceedings, the Company recorded
the following largely non-cash reorganization items:
Predecessor
Period from Period from
January 1 January 1
to January 31, to March 31,
(In millions) 2006 2005
Discharge of claims and liabilities $24,628 $- [a]
Revaluation of Mileage Plus frequent flyer
liability (2,399) - [b]
Revaluation of assets and liabilities 2,106 - [c]
Employee-related charges (898) (7)[d]
Contract rejection charges (429) - [e]
Professional fees (47) (44)
Pension-related charges (14) (433)[f]
Aircraft claim charges - (294)[g]
Other (13) 10
Total reorganization income (expense) $22,934 $(768)
[a] The discharge of claims and liabilities primarily relates to those
unsecured claims arising during the bankruptcy process, such as the
termination and settlement of the Company's U.S. defined benefit
pension plans and other employee claims; aircraft-related claims,
such as those arising as a result of aircraft rejections; other
unsecured claims due to the rejection or modification of executory
contracts, unexpired leases and regional carrier contracts; and
claims associated with certain municipal bond obligations based upon
their rejection, settlement or the estimated impact of the outcome of
pending litigation. In accordance with the Plan of Reorganization,
the Company discharged its obligations to unsecured creditors in
exchange for the distribution of 115 million common shares of the
Successor Company and the issuance of certain other securities.
Accordingly, the Company recognized a non-cash reorganization gain of
$24.6 billion.
[b] The Company revalued its frequent flyer miles to estimated fair value
as a result of fresh-start reporting, which resulted in a $2.4
billion non-cash reorganization charge.
[c] In accordance with fresh-start reporting, the Company revalued its
assets at their estimated fair value and liabilities at estimated
fair value or the present value of amounts to be paid. This resulted
in a non-cash reorganization gain of $2.1 billion, primarily as a
result of newly recognized intangible assets, offset partly by
reductions in the fair value of tangible property and equipment.
[d] Employee-related charges include the value of the deemed claim that
the salaried and management group received upon confirmation of the
Plan of Reorganization. The deemed claim was based upon the cost
savings provided by this employee group during the bankruptcy
process.
[e] Contract rejection charges are non-cash costs that include our
estimate of claims resulting from the Company's rejection or
negotiated modification of certain contractual obligations such as
executory contracts, unexpired leases and regional carrier contracts.
[f] In the first quarter of 2005, the Company recognized pension
curtailment charges of $433 million associated with actions taken by
the Pension Benefit Guaranty Corporation to involuntarily terminate
the Company's defined benefit pension plan for covered members of
certain ground employees.
[g] Aircraft claim charges include the Company's estimate of claims
incurred as a result of the rejection of certain aircraft leases and
return of aircraft as part of the bankruptcy process, together with
certain claims resulting from the modification of other aircraft
financings in bankruptcy.
(4) In accordance with the Plan of Reorganization, the Company may issue
up to 125 million shares (out of the one billion shares of new common
stock authorized under its certificate of incorporation). The new
common stock was listed on the NASDAQ National Market and began
trading under the symbol "UAUA" on February 2, 2006. The
distributions of common stock, subject to certain holdbacks as
described in the Plan of Reorganization, will be as follows:
* Approximately 115 million shares of common stock to unsecured
creditors and employees;
* Up to 9.825 million shares of common stock and options (or rights to
acquire shares) under the management equity incentive plan ("MEIP")
approved by the Bankruptcy Court; and
* Up to 175,000 shares of common stock and options (or rights to
acquire shares) under the director equity incentive plan ("DEIP")
approved by the Bankruptcy Court.
In accordance with Statement of Financial Accounting Standards No.
128, "Earnings per Share" ("SFAS 128"), basic and diluted loss per
share amounts were computed by dividing net loss by the weighted-
average number of shares of common stock outstanding for the two month
period ending March 31, 2006. SFAS 128 requires that the entire 115
million shares to be issued to unsecured creditors and employees be
considered outstanding, although the Company in fact has not issued
all 115 million shares at March 31, 2006. In addition, at March 31,
2006, stock options to purchase approximately 6 million shares of new
UAL common stock were outstanding, as were 4 million restricted
shares, but were not included in the computation of loss per share as
the effect of such would be antidilutive.
(5) Included in UAL's operating loss are the results of United's wholly
owned subsidiary United Aviation Fuels Corporation ("UAFC").
Predecessor Successor Predecessor
Period Period
from from Combined Period from
January 1 February 1 Periods January 1
to to Ended to %
January 31, March 31, March 31, March 31, Increase/
UAFC(in millions) 2006 2006 2006 2005 (Decrease)
Other operating
revenues $32 $74 $106 $56 89.3
Cost of sales 33 72 105 54 94.4
Income/(loss) from
operations $(1) $2 $1 $2 (50.0)
(6) UAL's results of operations include aircraft fuel expense for both
United mainline jet operations and regional affiliates. Aircraft fuel
expense incurred as a result of the Company's regional affiliates'
operations is reflected in the Regional Affiliates operating expenses.
In accordance with UAL's agreement with its regional affiliates, these
costs are incurred by the Company.
Year-Over-Year Impact of Fuel Expense
United Mainline and Regional Affiliate Jet Operations
Predecessor Successor Predecessor
Period Period
from from Combined Period from
January 1 February 1 Periods January 1
to to Ended to %
January 31, March 31, March 31, March 31, Increase/
2006 2006 2006 2005 (Decrease)
GAAP mainline fuel
expense
(in millions) $ 362 $ 705 $1,067 $ 805 32.5
Regional affiliates
fuel expense
(in millions) 62 133 195 143 36.4
United system
fuel expense
(in millions) $ 424 $838 $1,262 $ 948 33.1
Mainline fuel
consumption
(in millions
of gallons) 185 363 548 550 (0.4)
Mainline average jet
fuel price per
gallon (in cents) $195.6 $194.1 $194.6 $146.5 32.8
(7) The tables below set forth certain operating statistics for United's
mainline, regional affiliates and consolidated operations:
For the combined periods ended March 31, 2006
[a] [a]
North Pacific Atlantic Latin Total Regional Consolidated
America Mainline Affiliates
ASM (in
millions) 20,819 7,636 4,316 1,717 34,488 3,734 38,222
RPM (in
millions) 16,571 6,265 3,290 1,336 27,462 2,824 30,286
Passenger
revenues
(in millions)2,070 657 392 137 3,256 669 3,925
PRASM
(cents) 9.95 8.61 9.07 7.99 9.44 17.93 10.27
Yield
(cents)[b] 12.45 10.46 11.79 10.05 11.82 23.70 12.93
Load Factor
(percent) 79.6 82.0 76.2 77.9 79.6 75.6 79.2
For the period ended March 31, 2005
[a] [a]
North Pacific Atlantic Latin Total Regional Consolidated
America Mainline Affiliates
ASM(in
millions) 20,210 7,657 4,911 1,481 34,259 3,311 37,570
RPM(in
millions) 15,773 6,128 3,732 1,151 26,784 2,404 29,188
Passenger
revenues
(in
millions) 1,789 604 407 116 2,916 524 3,440
PRASM
(cents) 8.85 7.89 8.29 7.87 8.51 15.81 9.16
Yield
(cents)[b] 11.30 9.81 10.42 9.69 10.83 21.78 11.74
Load Factor
(percent) 78.0 80.0 76.0 77.7 78.2 72.6 77.7
[a] For segment reporting purposes, the Company aggregates Regional
Affiliates results within the North America segment.
[b] Segment yields exclude charter revenue and revenue passenger miles.
(8) Pursuant to SEC Regulation G, the Company has included the following
reconciliation of reported non-GAAP financial measures to comparable
financial measures reported on a GAAP basis. The Company believes
that the reported non-GAAP financial results provide management and
investors a better perspective of the Company's core business and on-
going financial performance and trends by excluding reorganization
items for comparative purposes.
[a] Predecessor Successor Predecessor
Period from Period from Combined Period from
January 1 February 1 Periods January 1
to to Ended to %
January 31, March 31, March 31, March 31, Increase/
2006 2006 2006 2005 (Decrease)
(In millions, except
per share)
Net income/(loss) 22,851 (223) 22,628 (1,070) -
Adjusted for:
Reorganization
items, net 22,934 - 22,934 (768) -
Net loss excluding
reorganization (83) (223) (306) (302) 1.3
Adjusted loss per
share, basic
and diluted $(0.72) $(1.95) $(2.62)
The tables below set forth the reconciliation of non-GAAP financial measures for certain operating statistics that are used in determining key indicators such as operating revenue per available seat mile ("RASM"), adjusted passenger revenue per revenue passenger mile ("Yield") and operating expense per available seat mile ("CASM").
Predecessor
Combined Period from
Periods January 1
Ended to %
March 31, March 31, Increase/
2006 2005 (Decrease)
[b]Yield (in millions)
Passenger - United Airlines 3,256 2,916 11.7
Less: industry reduced fares &
passenger charges 11 14 (21.4)
Mainline adjusted passenger revenue 3,245 2,902 11.8
Mainline revenue passenger miles 27,462 26,784 2.5
Mainline adjusted Yield (in cents) 11.82 10.83 9.1
Consolidated passenger revenue 3,925 3,440 14.1
Less: industry reduced fares &
passenger charges 11 14 (21.4)
Consolidated adjusted passenger
revenue 3,914 3,426 14.2
Consolidated revenue passenger
miles 30,286 29,188 3.8
Consolidated adjusted Yield
(in cents) 12.93 11.74 10.1
[c] RASM (in millions)
Mainline
Consolidated operating
revenues 4,465 3,915 14.0
Less: Passenger - Regional
Affiliates 669 524 27.7
Mainline operating revenues 3,796 3,391 11.9
Mainline available seat miles 34,488 34,259 0.7
Mainline RASM (in cents) 11.01 9.90 11.2
Mainline operating revenues 3,796 3,391 11.9
Less: UAFC 106 56 89.3
Mainline operating revenues
excluding UAFC 3,690 3,335 10.6
Mainline excluding UAFC RASM
(in cents) 10.70 9.74 9.9
[d] CASM (in millions)
Mainline
Consolidated operating expenses 4,636 4,165 11.3
Less: Regional Affiliates 696 645 7.9
Mainline operating expenses 3,940 3,520 11.9
Mainline available seat miles 34,488 34,259 0.7
Mainline CASM (in cents) 11.42 10.28 11.1
Mainline operating expenses 3,940 3,520 11.9
Less: mainline fuel expense 1,067 805 32.5
Less: cost of sales - UAFC 105 54 94.4
Mainline operating expenses
excluding mainline fuel
expense & UAFC 2,768 2,661 4.0
Mainline excluding fuel & UAFC CASM
(in cents) 8.03 7.77 3.3
Regional Affiliates
Regional Affiliates operating
expenses 696 645 7.9
Less: fuel expense 195 143 36.4
Regional Affiliates excluding
fuel expense 501 502 (0.2)
Regional Affiliates available
seat miles 3,734 3,311 12.8
Regional Affiliates excluding
fuel CASM (in cents) 13.41 15.15 (11.5)
Consolidated
Consolidated operating expenses 4,636 4,165 11.3
Less: fuel expense & UAFC 1,367 1,002 36.4
Consolidated operating expenses
excluding fuel & UAFC 3,269 3,163 3.4
Consolidated available seat miles 38,222 37,570 1.7
Consolidated excluding fuel &
UAFC CASM (in cents) 8.55 8.42 1.5
Notes:
(i) UAFC's revenues and expenses are not derived from mainline jet
operations. Therefore, UAL has excluded these revenues and expenses
from the above reported GAAP financial measures. See Note 5 above
for more details.
(ii) Because the price of fuel is affected by economic and political
factors not within management's control, management believes that
excluding fuel cost from unit cost provides a meaningful comparative
basis for investors to evaluate the Company's performance with
respect to more controllable operating expenses.
UAL CORPORATION AND SUBSIDIARY COMPANIES
Combined Successor and Predecessor Company Operating Statistics
(Mainline and Regional Affiliates *)
Combined Three
Periods Months
Ended Ended %
March 31, March 31, Increase/
2006 [a] 2005 (Decrease)
Mainline revenue passengers (in
thousands) 16,267 15,667 3.8
Revenue passenger miles (in millions)
Mainline 27,462 26,784 2.5
Regional affiliates 2,824 2,404 17.5
Consolidated 30,286 29,188 3.8
Available seat miles (in millions)
Mainline 34,488 34,259 0.7
Regional affiliates 3,734 3,311 12.8
Consolidated 38,222 37,570 1.7
Passenger load factor (percent)
Mainline 79.6 78.2 1.4 pts.
Regional affiliates 75.6 72.6 3.0 pts.
Consolidated 79.2 77.7 1.5 pts.
Consolidated breakeven passenger load
factor (percent) 82.7 83.4 (0.7)pts.
Passenger revenue per passenger mile
- Yield (cents) [8b]
Mainline adjusted 11.82 10.83 9.1
Regional affiliates 23.70 21.78 8.8
Consolidated adjusted 12.93 11.74 10.1
Passenger revenue per available seat
mile - PRASM (cents)
Mainline 9.44 8.51 10.9
Regional affiliates 17.93 15.81 13.4
Consolidated 10.27 9.16 12.1
Operating revenue per available seat
mile - RASM (cents) [8c]
Mainline 11.01 9.90 11.2
Mainline excluding UAFC 10.70 9.74 9.9
Regional affiliates 17.93 15.81 13.4
Consolidated 11.68 10.42 12.1
Operating expense per available seat
mile - CASM (cents) [8d]
Mainline 11.42 10.28 11.1
Mainline excluding fuel and UAFC 8.03 7.77 3.3
Regional affiliates 18.64 19.47 (4.3)
Regional affiliates excluding fuel 13.41 15.15 (11.5)
Consolidated 12.13 11.09 9.4
Consolidated excluding fuel and UAFC 8.55 8.42 1.5
Mainline unit loss (cents) (0.41) (0.38) 7.9
Mainline unit earnings excluding fuel
and UAFC (cents) 2.67 1.97 35.5
Number of aircraft in operating fleet
at end of period
Mainline 460 466 (1.3)
Regional affiliates 300 314 (4.5)
Consolidated 760 780 (2.6)
Other Mainline Statistics
Mainline average price per gallon of
jet fuel (cents) 194.6 146.5 32.8
Average full-time equivalent
employees (thousands) 53.6 56.3 (4.8)
ASMs per equivalent employee -
productivity (thousands) 643 609 5.6
Average stage length (in miles) 1,360 1,361 (0.1)
Revenue block hours (in thousands) 451 453 (0.4)
Plane days (in thousands) 41 43 (4.7)
Fleet utilization (in hours and minutes) 10:54 10:37 2.7
* Mainline includes United Air Lines, Inc. scheduled and chartered jet operations. Regional Affiliates include operations from regional carriers with whom the Company has entered into capacity purchase agreements to provide jet and turboprop operations branded as United Express. [a] The combined periods include the results for one month ended January 31, 2006 (Predecessor Company) and two months ended March 31, 2006 (Successor Company). Worldwide Communications Media Relations Office: 847.700.5538 Evenings/Weekends: 847.700.4088 SOURCE UAL Corporation CONTACT: United Airlines Worldwide Communications: Media Relations Office: +1-847-700-5538, or Evenings/Weekends: +1-847-700-4088 |
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