United Continental Beats Expectations For First Quarter

Despite the controversy swirling around United Airlines right now, its parent company United Continental Holdings Inc. (NYSE:UAL) beat first-quarter earnings expectations. Excluding special items, United posted earnings of 41 cents per share on revenue of $8.42 billion, higher than analysts’ estimates for earnings of 38 cents per share on revenue of $8.38 billion. Revenue was up 2.7 percent year-over-year.

Chief Executive Oscar Munoz said, “In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building.” Shares of United rose 2.46 percent after closing 1.7 percent higher at $70.77. United’s shares have fallen more than 3 percent this year as of Monday afternoon.

Munoz apologized again during the earnings release for the public relations nightmare that has plagued the company in recent weeks. The forceful removal of a paying passenger from a flight last week to make space for airline employees angered many and caused a social media firestorm. Munoz said, “It is obvious from recent experiences that we need to do a much better job serving our customers.”

The statement from Munoz continued, “The incident that took place aboard Flight 3411 has been a humbling experience, and I take full responsibility. This will prove to be a watershed moment for our company, and we are more determined than ever to put our customers at the center of everything we do. We are dedicated to setting the standard for customer service among U.S. airlines, as we elevate the experience our customers have with us from booking to baggage claim.”

The outrage started after video started circulating on social media showing Dr. David Dao being dragged off an overbooked flight in Chicago. An attorney for Dr. Dao condemned the airline for using “unreasonable force and violence” to remove him from a seat he had paid for and was sitting in. The video made the airline the target of global criticism and ridicule.

Dr. Dao suffered a significant concussion, broken nose and lost two front teeth in the incident, and will need reconstructive surgery. The attorney said his client will probably pursue a lawsuit. United ‘s board has apologized to Dr. Dao and his family.

Following the fiasco, United Airlines has decided to change its policy on booking its own flight crews onto its planes. Now, crew members riding on its aircraft as passengers must be booked at least 60 minutes before departure. The company feels that this will avoid the removal of passengers from their seats after they have already boarded the plane.


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