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United Posts Sole Airline Loss as Southwest Beats Views

United Continental Holdings Inc. (UAL) posted a first-quarter loss, the only one among the major U.S. carriers, while Southwest Airlines Co. (LUV) joined peers with profits in the slowest travel period of the year.

United’s adjusted loss of $325 million, or 98 cents a share, was narrower than analysts’ estimates. While Southwest and Alaska Air Group Inc. (ALK) beat profit projections today, JetBlue Airways Corp. (JBLU) trailed estimates as fallout from Hurricane Sandy eroded revenue.

Today’s earnings reports capped results for the biggest U.S. airlines, with six of the seven making money in a quarter that’s often unprofitable as winter weather damps travel. Higher fares, curbing expenses and lower fuel prices helped. United, the world’s largest carrier, was hurt by a 1.3 percent rise in total operating costs.

“We are focused companywide on operating more efficiently,” United Chief Financial Officer John Rainey said in a statement.

Southwest, JetBlue and Alaska follow peers Delta Air Lines Inc. (DAL), US Airways Group Inc. (LCC) and American Airlines parent AMR Corp. (AAMRQ) in posting adjusted profits for the first quarter.

Southwest’s earnings excluding some gains were $59 million, or 7 cents a share, trouncing the 2-cent average projection among 15 analysts surveyed by Bloomberg. JetBlue’s profit slipped to 5 cents a share, trailing the 10-cent estimate by analysts, while Alaska’s 62-cent profit topped forecasts of 56 cents.

Stock Reaction

United fell 1.6 percent to $30.89 at the close of trading in New York, and JetBlue dropped 4.6 percent, the most in the Bloomberg U.S. Airlines Index, to $6.85. Southwest was unchanged at $13.42. Alaska fell 1.1 percent to $60.24.

The loss at United included costs of $11 million from grounding its six Boeing Co. (BA) 787 Dreamliners, which were taken out of service Jan. 16 following battery failures on two planes flown by Japanese airlines. U.S. regulators approved fixes on April 19 that would allow Dreamliner flights to resume.

United spent 7.6 percent more on aircraft maintenance and 12 percent more on wages as the Chicago-based airline reached a higher-paying contract with the union for fleet and passenger service workers. The airline also had to keep paying 787 pilots through the grounding.

Sales rose 1.4 percent to $8.7 billion.

To contact the reporters on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net.

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

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