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EARNINGS

UAL Ends '86 in Black; Posts Loss in Quarter

January 27, 1987

UAL Inc., parent of the second largest U.S. airline, Monday reported 1986 earnings of $11.6 million, compared to a $48.7-million loss a year earlier.

The Chicago-based company, which termed last year's financial results "disappointing," said the 1985 figure was not comparable to 1986's because of a 29-day strike in 1985 by workers at United Airlines, its major subsidiary.

During its fourth quarter, UAL lost $13.6 million, compared to earnings of $20.8 million in the same 1985 period. Consolidated results in the fourth quarter of 1985 included a $136.8-million gain from the recapture of pension fund assets at United.

UAL said it benefited from foreign exchange gains of $19 million during the quarter. "Substantially all were unrealized gains on (Japanese) yen-dominated debt due 1991 through 2001," UAL said.

United Airlines, which had a fourth-quarter operating loss of $13.1 million and a full-year operating profit of $73.3 million, improved its U.S. market share in 1986 to 17% from 14.8% in 1985.

UAL said it had consolidated revenue of $9.2 billion in 1986, up 44% over the $6.4 billion it reported a year earlier.

UAL, which also owns the Hertz rental car company and the Westin hotel chain, said that its labor expense remained high compared to other carriers. The firm said it will focus on lowering that cost.

"Industry consolidation and growth among lower-cost competitors has resulted in United (Airline's) labor expense per available seat mile being higher than many of its competitors," UAL said.

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