2 airlines' profits beat 3rd-quarter forecasts

— Packed planes brought in better-than-expected profit for two airlines Tuesday, as both UAL Corp. and JetBlue Airways Corp. surprised Wall Street with improved third-quarter earnings.

Shares of both companies climbed as the industry showed glimmers of resurgence, at least temporarily, after quarters ofweakness brought on from the Sept. 11 terrorist attacks.

At Chicago-based UAL, the parent company of United Airlines, pared down costs, and better passenger revenue helped the company boost earnings nearly 76 percent to $334 million, its best quarterly profit in more than seven years.

"This quarter we were clearly hitting on all cylinders," said JakeBrace, UAL's chief financial officer

Meanwhile, low-cost carrier JetBlue reported its first thirdquarter profit in two years, earning $23 million compared with a year-ago loss.

But the Forest Hills, N.Y.-based carrier also warned it would drop service to Columbus, Ohio, and Nashville, Tenn., and a flight connecting Fort Lauderdale, Fla., to Oakland, Calif.

Part of the airlines' performance was driven by an almost industrywide push to scale back capacity on domestic flights, so that packed planes became more profitable for each mile traveled.

Major U.S. carriers raised fares at least four times in the quarter, even as flight delays set records because of airspace congestion and bad weather.

At UAL, the company said its plans to reduce North American capacity would continue, falling up to 3.5 percent by the end of 2007 and up to 4 percent more in 2008.

At UAL, the nation's No. 2 carrier, earnings for the July-through-September quarter amounted to $2.21 per share, up from $190 million, or $1.30 per share.

Excluding special items, many related to the company's emergence from federal bankruptcy protection in February 2006, the company earned $295 million, or$1.96 per share, easily topping Wall Street forecasts. Revenue company climbed 6.8 percent to $5.53 billion.

JetBlue's profit for the three months ending Sept. 30 rose to $23 million, or 12 cents per share. One year ago, JetBlue lost $500,000, breaking even on a pershare basis.

Revenue rose to $765 million from $628 million a year ago. Plane occupancy grew 1.6 percentage points over the year-earlier period to 82 percent; capacity jumped 10.9 percent.

United shares climbed $3.36, or 7 percent, to close at $51.49 Tuesday; JetBlue shares rose 37 cents, or 4.1 percent, to end at $9.45.

Information for this article was provided by Hugo Miller and Susanna Ray of Bloomberg News and John Wilen of The Associated Press.

Business, Pages 29, 30 on 10/24/2007

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