United Declines Most in Month on April Revenue Forecast

United Continental Holdings Inc. (UAL) fell the most in a month after the world’s largest airline forecast growth in a benchmark revenue measure that lagged behind outlooks of U.S. peers.

Revenue for each seat flown a mile will rise 5 percent in April, Chief Revenue Officer Jim Compton said on a conference call today. He said weaker China demand and blending previously separate airline units are keeping the carrier from reaping the benefits of the 2010 merger that created the company.

The projection trailed forecasts yesterday for April gains in so-called unit revenue of 11 percent at Delta Air Lines Inc. (DAL) and 9 percent at US Airways Group Inc. (LCC) United slid 3.7 percent, the most since March 30, to $22.12 at the close in New York after paring an earlier decline.

“My concerns are how quickly we can innovate and chase the synergies” of the merger, Compton said on the call, which followed Chicago-based United’s first-quarter earnings release. “We’re comfortable with where we’re at.”

The company was formed when United Airlines parent UAL Corp. merged with Continental Airlines Inc. The United and Continental units shifted to joint booking and revenue- management systems last quarter.

United is preparing to change about 15 percent of flights on its main jet operations this quarter to move some aircraft to more-profitable routes and shuffle larger or smaller planes on some other trips to match demand, Compton said.

The airline is also working on restoring some functions to its website that were lost when United.com and Continental.com were combined in March, such as the ability to buy day passes to airport lounges or purchase seats with extra legroom for an entire year for a one-time subscription fee.

Financial Results

United’s quarterly loss excluding certain items was $286 million, or 87 cents a share, according to a statement. Analysts estimated a loss of $1.10 a share on that basis, the average of 15 projections compiled by Bloomberg.

Revenue rose 4.9 percent to $8.6 billion, matching analysts’ estimates, as United was able to charge more for tickets.

Including $162 million of integration-related charges, the net loss widened to $448 million, or $1.36 a share, from $213 million, or 65 cents, a year earlier. A $3.2 billion fuel bill was 21 percent more than a year earlier.

JetBlue Airways

JetBlue Airways Corp. (JBLU) also reported quarterly earnings today, posting a 10-fold jump in net income to $30 million, or 9 cents a share. That exceeded an 8-cent average analyst estimate compiled by Bloomberg. The shares rose 1 cent to $4.65.

The New York-based carrier forecast an increase of 8 percent to 9 percent in April unit revenue, and Chief Executive Officer Dave Barger said the company is “encouraged as we look at summer.”

JetBlue will face higher maintenance costs the rest of the year as it tries to find a new maintenance provider following the unexpected closing last month of Aveos Fleet Performance Inc. in Canada, Chief Financial Officer Mark Powers said.

The airline already was facing increased maintenance spending because of its aging fleet of Airbus SAS A320 aircraft. Costs linked to the Aveos shutdown may be $9 million to $11 million in 2012, Barger said.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net;

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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