Three Airlines Post Higher Profits

Eastern Airlines’ earnings rose, Continental Airlines had a record quarterly profit and Frontier Holdings’ net income climbed sharply, according to third-quarter reports Tuesday.

Eastern’s and Frontier’s results were pulled up by gains unrelated to operating results, and all three airlines’ bottom lines benefited by comparison with the industry’s weakness a year ago.

Miami-based Eastern Airlines said it earned $23.9 million for the third quarter of 1985, compared to a $3.6-million profit for the same period a year ago.

However, Eastern’s income was boosted by adding $52.5 million to its bottom line from an employee profit-sharing reserve, which was created earlier this year. It would otherwise have posted a loss.

Eastern spokesman Glenn Parsons said the profit-sharing money will not be given out to employees until the end of the year.

Eastern’s third-quarter results represented the fifth consecutive quarterly profit for Eastern, going back to the third quarter of 1984.

Eastern’s operating revenue rose to $1.2 billion in the third quarter of 1985, compared to $1.1 billion in the same period in 1984.

Eastern Chairman Frank Borman said in a news release that results “were adversely affected by several factors, including increased employment expenses and highly competitive fare discounting.”

For the nine months ended Sept. 30, Eastern reported a net profit of $73.8 million after setting aside $20 million for the profit-sharing program. That compared to a net loss of $48.7 million for the same period last year.

Eastern’s revenue for the nine months was $3.7 billion, compared to $3.2 billion for the first nine months of last year.

Houston-based Continental Airlines said its third-quarter profit of $41.3 million was the largest in its 51-year history and the sixth consecutive profit since it filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Continental’s results represented a 36% increase from a net of $30.3 million a year earlier.

Continental’s third-quarter earnings were calculated after setting aside $9.6 million for its profit-sharing plan. So far in 1985, the airline has set aside $21.1 million for employee profit sharing. It made $8.3 million in profit-sharing payments to employees in 1984.

Continental reported a $91.7-million profit in the first nine months, a 156% increase from net income of $35.8 million in the same period a year ago. Revenue rose to $1.3 billion from $839 million.

Frontier Holdings Inc., the Denver-based parent company of Frontier Airlines, said it had a third-quarter net profit of $33.6 million, compared to a net profit of $5.8 million for 1984’s third quarter. Revenue was $187.9 million, up from $150 million.

Frontier said it benefited from a pretax gain of $59.7 million from the sale of aircraft.

Frontier’s board of directors earlier this month agreed to allow People Express to buy the company for $24 a share. The deal is pending ratification by union members and approval by shareholders and the Department of Transportation.

Frontier said that, for the nine months ended Sept. 30, it had a net profit of $54.2 million, compared to a net loss of $10 million for the like period in 1984.

Frontier’s operating revenue was down $27.8 million for the quarter to $150 million and down $73.7 million for the nine months to $453 million, when compared to the similar periods in 1984. The company attributed the fall-off to a reduction in volume because of its shrunken operations and industry price cutting.