Experience The Skies

United Airlines CEO Suffered A Heart Attack

United Airlines Boeing 757

United Continental Holdings Inc released a statement stating that its Chief Executive Officer Oscar Munoz was admitted to a Chicago area hospital on Thursday, October 15, 2015.

United Airlines

Oscar Munoz took over the helm at United Airlines a little over a month ago (News – September 8, 2015) from outgoing CEO Jeff Smisek who resigned amid internal and federal investigations over the carrier’s relationship with the Port Authority of New York and New Jersey.

The Wall Street Journal reported on Friday that the CEO suffered a heart attack. The company’s board is waiting for the news of Munoz’s condition before it will decide whether an interim leader is necessary.

Munoz has been praised for his strong stance in building better relationships with unions, workers and customers. In light of his health conditions, he did not make a labor summit scheduled yesterday.


Stock Performance

Shares of United Airlines is down almost 3% in afternoon trading. Since taking the leader role, shares have been trading around even at $US56.

United Airlines Stock Price - October 16, 2015
United Airlines Stock Price – October 16, 2015
Source: Google Finance


In an earlier filing with the U.S. Securities and Exchange Commission on October 9, 2015,  its holding company noted some positives for its third-quarter results:

Passenger Revenue: Third-quarter 2015 passenger revenue performance year-over-year was primarily impacted by a strong U.S. dollar, lower surcharges, travel reductions from energy dependent corporate customers and a softening in domestic yields.

Other Revenue: Other revenue performed better than expected in the third quarter, largely driven by approximately $100 million from the combined impact of the amended co-branded card marketing services agreement with Chase Bank USA, N.A., the related amendments to the agreements with Visa U.S.A., Inc., JPMorgan Chase Bank, N.A. and Paymentech LLC, and updated assumptions for accounting purposes.

Non-Fuel Expense: In the third quarter, the strong U.S. dollar contributed to 1 point of unit cost benefit. The Company’s third-quarter non-fuel unit cost was better than original guidance due to higher than expected consolidated capacity, timing of certain expense items and better-than-expected performance in its Project Quality efficiency program.

It is expected that United Airlines would report strong 3rd quarter financial results on October 22, 2015.  While revenue per available seat mile (RASM) is down 0.52%,  cost per available seat mile (CASM) should be down 1.5% owing fuel costs and stronger US dollars. This should bring pretax margin up overall and is following industry trend for 2015. For example, Delta Air Lines’ reported record profit of $US1.4 billion for the same quarter largely due to lower fuel prices.


It should be business as usual for the airline’s operations. All airlines have a business continuity plan implemented and tested to manage unusual and unexpected events that may impact the company. However, new capital projects which require approvals may be delayed.

United Airlines has been on a rebound from disappointing operational results back in the winter and spring owing to poor weather at its hubs in Chicago (ORD) and Newark (EWR). For September 2015, RASM is higher than ASM in growth. Domestic traffic continued to fuel growth.

United Airlines Q3 2015 Operating Results
United Airlines Q3 2015 Operating Results
Source: United Airlines

Both on-time performance and completion factor are up from the same time last year. The 86.2% figure is particularly strong compared it against (Sept 2014-August 2015) figure of 76.2% (Source: BTS).

Preliminary Operational Results (Source: United Airlines)
2015 2014 Change
September On-Time Performance 86.2% 80.7% +5.5%
September Completion Factor 99.6% 98.7% +0.9%

The airline is making strides in building a better passenger experience by rebuilding its ground services (News – August 10, 2015) and improving its catering starting on November 1, 2015 across its network (source).

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