EARNINGS : UAL, Delta, USAir Report Robust 1st Quarters

UAL Corp. and Delta Air Lines Inc. reported record first-quarter profits Thursday while USAir Group Inc. turned a profit after suffering a significant loss a year ago.

UAL Leads the Pack as Its Profits Double

Chicago-based UAL Corp., the parent of United Airlines, the nation’s largest carrier, led the pack, reporting that first-quarter profit from continuing operations more than doubled to a record $65.4 million, compared to $27.9 million for the year-ago period. The results exclude a gain of $548.5 million from the sale of operations in the first quarter of 1988.

Operating revenue rose to $2.33 billion from $2.06 billion a year ago.

UAL said United Airlines had the highest load factor of the major carriers in the quarter as well as much improved revenue yields. The company noted that it made the gains without the extensive benefits that other airlines reaped from the strike by Texas Air Corp.’s Eastern Airlines unit.

United Airlines on Wednesday ordered up to 370 aircraft from Boeing Co. for $15.74 billion, the largest such order in U.S. history, indicating that it expects further growth. UAL shares closed up $1.50 at $131.50 in trading on the New York Stock Exchange.

Separately, UAL Chairman Stephen M. Wolf told the company’s annual meeting in Washington that although he has discussed acquiring some of Eastern’s assets he did not think United would ultimately be a buyer.

Eastern, crippled by a machinists strike that began March 4 and pushed it into bankruptcy proceedings, is seeking to sell off assets and reorganize as a smaller carrier.

Delta’s Net for Period Is Company Record

Atlanta-based Delta Air Lines Inc. said its net income rose 51.5% to $85.0 million in its first quarter, compared to $56.1 million in the year-ago period. It attributed the gains to sharp growth in passenger revenue, boosted partly by the Eastern Airlines strike.

Delta said good economic conditions, continuing benefits from a merger with Western Air Lines and growth in domestic and international operations also contributed to the increase.

The company said the profit was a record for the period. Operating revenue rose 19% to $2.04 billion, compared to $1.71 billion last year.

“The key to the increased earnings was the 20% growth in passenger revenues,” Thomas Roeck, chief financial officer, said in a statement.

“The strike against a major competitor during the month of March resulted in increased revenue passenger miles,” he said, “but traffic growth was strong in January and February prior to the strike, and in many markets not affected by the strike.”

He said passenger traffic increased 13% in Atlanta, one of the areas most affected by the Eastern strike.

“Yet traffic for the first three months of the year was up 8% in Dallas-Fort Worth, 37% in Honolulu, 15% in Los Angeles and 10% in Salt Lake City--all markets where Eastern is not a competitor,” Roeck said.

USAir Posts a Profit; Had Loss a Year Ago

Washington-based USAir Group Inc. reported a first-quarter profit of $15.5 million contrasted with a loss of $18.8 million in the year-ago period. Operating revenue rose 18% to $1.48 billion, compared to $1.25 billion a year ago.

The company said the results reflected significant improvements in yield at both USAir and Piedmont, increasing benefits of last year’s merger with Pacific Southwest Airlines, which has resulted in the expansion of long-haul flying linking the West Coast with the Midwest and Northeast, and improved scheduling efficiency.

Both USAir and Piedmont also benefited during the quarter from the disruption of most operations at Eastern.

Included in the consolidated results are USAir Group’s principal operating subsidiaries, USAir and Piedmont Aviation and four wholly owned commuter airlines. Piedmont was acquired by USAir Group on Nov. 5, 1987, and will be merged with USAir on Aug. 5, 1989.