The incident on United Flight 3411 last week that sent the
airline into an unprecedented public relations crisis hasn't caused it to
downgrade performance expectations going into the second quarter.
"Our forecast for the quarter didn't change at all,"
president Scott Kirby said during United's first-quarter earnings call Tuesday
morning.
Kirby added that it is too early to know if bookings have
been impacted.
Kirby, United CEO Oscar Munoz and CFO Andrew Levy each used
the occasion of the call to once again take responsibility for what Kirby
called "this terrible event," when David Dao was ultimately dragged
off the April 9 flight from Chicago O'Hare to Louisville after he refused to
give up his seat to a crew member of Republic Airways, which was operating the
flight for United.
Nevertheless, executives expressed confidence in the
direction United is headed, with Kirby saying that a 3-month-old effort to fill
in network gaps out of the airline's hubs is improving margins faster than
expected.
Kirby also highlighted improvements in United's operational
performance. The mishandled-baggage rate was down year-over-year in the first
quarter and United flew 25 days in the first quarter without a cancellation. Highlighting
that achievement, Kirby said United did not have 25 cancellation-free days in
the five-year period from 2011 through 2015.
United is projecting that pre-tax profit margins in the next
quarter will exceed this quarter's 1.7%, and that passenger revenue per
available seat mile, a key industry metric, will rise 1% to 3%.
For the first quarter, United recorded net income of $96
million, down from $313 million a year ago. Operating revenue jumped 2.7% to
$8.42 billion, beating analyst expectations by $40 million, according to the
website Seeking Alpha. However, expenses increased 7.9% as salaries went up and
fuel costs rose.
United's earnings per share was 41 cents, beating
expectations by 3 cents.
United stock struggled during the first half of the day and
was trading at $67.92 as of approximately 12:45 Eastern time, down 4%.