United loses $609M in 1Q; fares don't cover costs
United Airlines is the one U.S. carrier that can't seem to get its act together.
While all the other major airlines made money in the first quarter, United lost $609 million during the first three months of this year.
United attributed $200 million of its loss to the "historic severe" winter weather that impacted much of the U.S. this past winter. But by comparison, Delta Air Lines made $213 million in the same quarter while dealing with the same ice and snow storms.
Chicago-based United is still struggling to combine systems and see financial benefits following its 2010 merger with Continental Airlines. In the first quarter, its cost for each mile passengers flew rose 1 percent but its related revenue fell 2 percent. It simply isn't able to charge high enough airfares.
United lost $1.66 per share, worse than the $1.26 per share it lost during the same period last year. Excluding special items, the loss was $1.33 per share, barely beating the $1.35 loss expected by Wall Street analysts surveyed by FactSet.
United's revenue slipped 0.3 percent to $8.7 billion, just short of the $8.71 billion Wall Street analysts had expected.
The one bright spot for United was that it paid less for fuel: $3.18 a gallon, down from $3.28 during last year's first quarter. Considering that the airline used 916 million gallons during the period, that added up to $133 million in savings.
"While we are not pleased with our first-quarter financial results, we are building a strong foundation that will result in improved financial performance," John Rainey, chief financial officer for United Continental Holdings, Inc., said in a statement.
United also lost $21 million during the quarter due to an exchange rate loss in Venezuela. Approximately $100 million of the company's unrestricted cash balance was held as Venezuelan bolivars as of March 31, 2014. All international airlines flying there have struggled with a quickly devaluing currency and have billions of dollars tied up in bolivars that can't be quickly converted because of Venezuelan currency controls.
Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott.
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