Merged United Continental performs better than expected


Jan. 27--United Continental Holdings Inc. turned in a better-than-expected financial performance for the fourth quarter Wednesday and promised passengers of United and Continental airlines a more seamless flying experience by late spring.

By the end of the second quarter, customers will be able to check in at United or Continental ticket counters at most airports, purchase tickets through an integrated website and see the new branding strategy, first at United's hubs.

In the third quarter, a new airport lounge, the United Club, will begin operating. Later in the year, the two frequent-flier programs will be combined.

Customers, however, will have to wait another 30 to 60 days to learn the airline's seating plan for its aircraft, Jeff Smisek, the company's president and CEO, said Wednesday.

Seating configuration is an area being keenly watched by frequent-fliers who are eager to learn whether the new management, dominated by Continental executives, will retain United Airlines' Economy Plus coach seats.

During a conference call Wednesday with financial analysts to discuss fourth-quarter and full-year earnings for the combined company, Smisek said the carrier was moving swiftly to integrate its operations and manage its costs in a time of rising fuel prices. And while working on all those fronts, Smisek said the airline, whose merger became official Oct. 1, was not going to let competitors rob it of customers.

"Let me be clear," Smisek said. "We are not going to let that happen."

In the fourth quarter, the first in which United and Continental operated as a combined company, the company earned $160 million, or 44 cents a share, excluding merger-related and other costs of $485 million. Including those costs, United Continental lost $325 million, or $1.01 a share during the quarter.

The quarterly results were almost double Wall Street consensus estimates. Shares of United Continental closed Wednesday at $25.79 on the New York Stock Exchange, up nearly 7 percent.

Revenue in the quarter rose 15 percent on a pro forma basis, to $8.4 billion, and in the October-December period, 83 percent of its seats were filled. Executives noted that revenue derived from its premium passengers rose 20 percent in the fourth quarter, and additional investments are planned to benefit its most loyal customers.

Rising oil prices remain a concern. On a pro forma basis, the carrier's fuel costs rose 27 percent for the fourth quarter and 33 percent for the year. First-quarter fuel costs are up 18 percent from a year earlier, according to Zane Rowe, United Continental's executive vice president and chief financial officer.