United Airlines (UAL) is nearly 1% higher after the company reported upside first quarter earnings and gave encouraging guidance for the second quarter.
Chief Executive Oscar Munoz also acknowledged the work the company needs to do to improve its customer service after the PR nightmare from two weeks ago, when a video of security officers forcibly removing a United passenger who refused to give up his seat in an overbooked flight went viral.
He said, "In the first quarter of 2017, our financial and operational performance gives us a lot of confidence about the foundation we are building. It is obvious from recent experiences that we need to do a much better job serving our customers. 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."
He will expand on the company's new initiatives to improve customer service on the call at 10:30 this morning.
Coming back to the financials, adjusted earnings per share were $0.41, down from $1.23 last year. Consolidated unit cost per available seat mile (CASM) increased 5.1% year-over-year due largely to higher fuel expense and the impact of labor agreements ratified in 2016.
Revenue was $8.4 billion, an increase of 2.7% year-over-year. First quarter 2017 consolidated passenger revenue per available seat mile (PRASM) was flat and consolidated yield increased 0.4% compared to the first quarter of 2016.
United guided for second quarter PRASM up 1-3% with CASM up 4-5%. United is the second major airline to call for sequential improvement in the second quarter after Delta (DAL) did that last week.
United also reaffirmed guidance for fiscal 2017, calling for capacity up 2.5-3.5% and CASM up 2.5-3.5%. United had raised capacity and lowered CASM guidance in March.
American (AAL) and Southwest (LUV) will both report first quarter results next Thursday on April 27.