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United Airlines seeing revenue improvements in 2010

10-Mar-2010 10:46 AM

United Airlines CFO, Kathryn Mikells, at the JP Morgan Aviation, Transportation & Defense Conference, announced (09-Mar-2010) the following details regarding its operations:

  • PRASM: The carrier stated it has seen "recent revenue improvements" in its operations, which are "outpacing the industry", driven by improvements in international and business travel demand. PRASM levels increased 10.5% in Jan-2010 and 18.0% in Feb-2010 (figures based on mid-point of disclosed range), with the carrier's international premium cabin bookings up 8% and 25%, respectively, in the first two months of 2010 (off negative growth of 38% in both Jan-2009 and Feb-2010). Corporate customer revenues also gained, up 10% and 13%, respectively (from negative growth of 33% and 35%, respectively, in the corresponding periods in 2009;
  • Ancillary revenues: United Airlines claims to be a "leader in creating new revenue streams", generating USD13.17 per passeger from ancillary sources in 2009 (+22.2% year-on-year and up 70% from 2007 levels), which the carrier believes is "the highest of any US airline";
  • Cash balance: Had more than USD3.0 billion in unrestricted cash at the end of 2009, with the carrier raising an additional USD950 million in early 2010. The carrier plans to continue to strengthen its balance sheet as a priority as the economy improvements, and expects to begin to "throw off free cash" to benefit shareholders, as revenue grows and cost management improves (Dow Jones, 09-Feb-2010);
  • Fuel hedging: The carrier has 75% coverage in 1Q2010, of which roughly 50% is calls and 50% is swaps;
  • Fleet: The carrier is "looking at the full range of opportunities" for buying new narrowbody aircraft, and will make a decision this year.  [more]