United Airlines Reports 2018 Full-Year Performance

United (UAL) announced its full-year and fourth-quarter 2018 performance. UAL’s fourth-quarter unit revenue came in at the high end of its guidance range and also exceeded its full-year adjusted diluted earnings per share target laid out last January.

UAL reported full-year net income of $2.1 billion, diluted earnings per share of $7.70 (a 9.1 percent increase year-over-year), pre-tax earnings of $2.7 billion and pre-tax margin of 6.4 percent. UAL reported adjusted full-year net income of $2.5 billion, adjusted pre-tax earnings of $3.2 billion and adjusted pre-tax margin of 7.7 percent. ¹UAL increased its full-year 2018 adjusted diluted earnings per share outlook three times during the year despite a $2.4 billion year-over-year headwind from fuel. Full-year adjusted diluted earnings per share increased 33.5 percent year-over-year to $9.13, above the high end of the company’s most recent guidance range.¹

For 2019, UAL expects adjusted diluted earnings per share to again grow year-over-year to between $10.00 to $12.00. ²

UAL reported fourth-quarter net income of $462 million, diluted earnings per share of $1.70, pre-tax earnings of $556 million and pre-tax margin of 5.3 percent.
UAL reported fourth-quarter adjusted net income of $657 million, adjusted diluted earnings per share of $2.41 and adjusted pre-tax earnings of $814 million.
UAL reported fourth-quarter adjusted pre-tax margin of 7.8 percent,¹ expanding margin on an adjusted basis of 0.9 points versus the fourth-quarter of 2017.
UAL recovered 98% percent of the year-over-year increase in fuel prices in 2018.
Consolidated fourth-quarter passenger revenue per available seat mile (PRASM) increased 5 percent year-over-year, at the high end of the company’s fourth-quarter 2018 guidance range.
Consolidated fourth-quarter unit cost per available seat mile (CASM) increased 7.0 percent year-over-year.
Consolidated fourth-quarter CASM, excluding special charges, third-party business expenses, fuel and profit sharing, decreased 0.7 percent year-over-year.
Employees earned $334 million in profit sharing for 2018.

2018 Highlights

Record-Setting Operational Performance³

Set new UAL records by flying the most revenue passengers ever, operating the most mainline departures and achieving the fewest cancellations ever in a year, resulting in more UAL customers departing on-time in 2018 than ever before.
For the year, achieved the best completion rate in company history with more than 1.7 million flights.
In 2018, achieved the best ever company STAR performance (first departures of the day), with nearly 250,000 flights leaving on time.
In the fourth quarter, the company achieved top-tier performance in on-time departures among its largest competitors. For the December holiday season, UAL had its best-ever on-time departure performance while flying the most revenue customers it had ever flown during the holiday period.

Customer Experience

Opened three new United Polaris lounges located in San Francisco International Airport, Newark Liberty International Airport and Houston’s George Bush Intercontinental Airport.
Announced UAL’s newest premium seating, United® Premium Plus, which will provide more space, comfort and amenities on select international flights starting later this year.
Introduced a new boarding process designed to reduce customers’ stress by reducing time spent waiting in line and providing them with improved boarding information.
Expanded personal device entertainment option to all aircraft, providing at least one free entertainment option on all Wi-Fi equipped aircraft.
MileagePlus loyalty program voted Best Overall Frequent-Flyer Program in the world for the 15th consecutive year by readers of Global Traveler, and voted Favorite Frequent-Flyer Program in the Trazee Awards.

Employees

Employees earned incentive payments totaling approximately $14 million for achieving operational performance goals in the quarter, marking a full year of earned incentive payments totaling $55 million.
Introduced and trained over 90,000 team members on UAL’s new customer service decision framework, the core4, which focuses on the principles of safe, caring, dependable and efficient.
Deployed 6,000 iPads to maintenance employees, improving reliability and efficiency.
Unveiled a state-of-the-art flight training center in Denver, Colorado – the largest in the world and home to the company’s more than 30 full flight simulators representing all of UAL’s fleet types.
Successfully completed the full implementation of the flight attendant joint collective bargaining agreement, allowing the company to operate more efficiently and reliably.
Achieved the top score of 100 percent on the 2018 Disability Equality Index (DEI), a prominent benchmarking metric that rates U.S. companies on their disability inclusion policies and practices, also earning UAL a place on DEI’s 2018 “Best Places to Work” list.
Received “Best-of-the-Best” Award from the National LGBT Chamber of Commerce and National Business Inclusion Consortium for commitment to diversity and inclusion across all communities.

Network

Introduced 93 new routes, adding more flights in 2018 than any other U.S. airline.
Announced new international service including Washington-Dulles to Tel Aviv, Israel; San Francisco to Amsterdam, Netherlands; Newark/New York to Naples, Italy; as well as Newark/New York to Prague, Czech Republic and Denver to Frankfurt, Germany, all subject to government approval.
Launched several exciting new international routes including Houston to Sydney, San Francisco to Tahiti and Denver to London.
Announced schedule expansion at East Coast hubs in Newark/New York and Washington-Dulles to offer more nonstop flights to destinations popular with New York-area customers while reallocating largely connecting passenger flights to Washington-Dulles.
Announced a joint business agreement with Compañía Panameña de Aviación S.A. (Copa), Aerovías del Continente Americano S.A. (Avianca) and many of Avianca’s affiliates, pending government approval.

Fleet

Took delivery of 21 new Boeing aircraft, including four 777-300ER, four 787-9, three 787-10 and ten 737 MAX 9 aircraft.
In December 2018, ordered an additional four Boeing 777-300ER aircraft and 24 737 MAX aircraft.

Community and Environment

Pledged to reduce the company’s greenhouse gas emissions by 50 percent by 2050, the only U.S. airline to commit to emissions reductions, further strengthening UAL’s ambition to be the world’s most environmentally conscious airline.
Announced a total of $8 million in grants to benefit organizations in each of UAL’s domestic hub communities.
Announced new global partnership with the Special Olympics and flew hundreds of Team USA Olympic and Paralympic Winter Games 2018 athletes, coaches and family members to PyeongChang, South Korea, continuing the 38-year relationship between UAL and the United States Olympic Committee.
Ranked No. 1 among global carriers in Newsweek’s 2017 Global 500 Green Rankings, one of the most recognized environmental performance assessments of the world’s largest publicly traded companies.
Launched a Crowdrise fundraising campaign to support those affected by Hurricane Florence, Typhoon Mangkhut, flooding in Western Japan, wildfires in California and other disasters.

1 Adjusted pre-tax earnings and adjusted pre-tax margin exclude special charges, the mark-to-market (“MTM”) impact of financial instruments and imputed interest on certain capitalized leases. Adjusted net income and adjusted diluted earnings per share exclude special charges, the MTM impact of financial instruments, imputed interest on certain capitalized leases and certain tax adjustments. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included in the tables accompanying this release.

2 Excludes special charges and the MTM impact of financial instruments, the nature of which are not determinable at this time, and imputed interest on certain capitalized leases. Accordingly, UAL is not providing earnings guidance on a GAAP basis.

3 Company history defined as post-2010 merger; company records measured from 2010 merger.