OREANDA-NEWS. United Airlines (UAL) today reported a first-quarter 2014 net loss of USD 489 million, or USD 1.33 per share, excluding USD 120 million of special items. Including special items, UAL reported a first-quarter 2014 net loss of USD 609 million, or USD 1.66 per share.

* Historic severe weather increased United's first-quarter loss by approximately USD 200 million.
* United's consolidated passenger revenue per available seat mile (PRASM) decreased 2.0 percent in the first quarter of 2014 compared to the first quarter of 2013. Weather-related cancellations reduced first-quarter 2014 consolidated PRASM by approximately 1.5 percentage points.
* First-quarter 2014 consolidated unit costs (CASM) increased 1.0 percent year-over-year. First-quarter 2014 consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 3.1 percent year-over-year on a consolidated capacity reduction of 0.3 percent.
* UAL ended the first quarter with USD 6.0 billion in unrestricted liquidity.

"This quarter's financial performance is well below what we can and should achieve. We are taking the appropriate steps with our operations, network, service and product to deliver significantly better financial results," said Jeff Smisek, UAL's chairman, president and chief executive officer. "The entire United team is sharply focused on accomplishing the goals we have laid out for long-term financial success."

First-Quarter Revenue and Capacity
For the first quarter of 2014, total revenue was USD 8.7 billion, a decrease of 0.3 percent year-over-year. First-quarter consolidated passenger revenue decreased 2.3 percent to USD 7.4 billion, compared to the same period in 2013. Ancillary revenue per passenger in the first quarter increased 7.6 percent year-over-year to more than USD 21 per passenger. First-quarter cargo revenue decreased 7.9 percent versus the first quarter of 2013 to USD 209 million.

Other revenue in the first quarter increased 18.0 percent year-over-year to USD 1.1 billion, in large part due to an agreement to sell jet fuel to a third party.

Consolidated revenue passenger miles and consolidated available seat miles each decreased 0.3 percent year-over-year for the first quarter, driven largely by adverse weather, resulting in a first-quarter consolidated load factor of 81.1 percent.

First-quarter 2014 consolidated PRASM and consolidated yield each decreased 2.0 percent compared to the first quarter of 2013.

First-Quarter Costs
Total operating expenses increased USD 60 million, or 0.7 percent, in the first quarter versus the same period in 2013. Excluding special charges, first-quarter total operating expenses increased USD 100 million, or 1.1 percent, year-over-year.

First-quarter consolidated CASM increased 1.0 percent year-over-year. First-quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, increased 3.1 percent compared to the first quarter of 2013. Third-party business expense was USD 193 million in the first quarter of 2014.

"We are making good progress in reducing costs and delivering sustainable efficiencies, all while improving the product for our customers," said John Rainey, UAL's executive vice president and chief financial officer. "While we are not pleased with our first-quarter financial results, we are building a strong foundation that will result in improved financial performance."

Liquidity and Cash Flow
UAL ended the first quarter with USD 6.0 billion in unrestricted liquidity, including USD 1.0 billion of undrawn commitments under a revolving credit facility. The company generated USD 694 million of operating cash flow in the first quarter. During the first quarter, the company had gross capital expenditures of USD 737 million, excluding fully reimbursable projects. The company made debt and capital lease principal payments of USD 637 million in the first quarter.