CHICAGO (AP) — Putting United and Continental together as one airline is proving more expensive and messy than its executives had hoped.
The airline's parent company disclosed additional integration costs on Tuesday.
United Continental Holdings Inc. also said 1,300 flight attendants volunteered to retire early in exchange for a cash payment.
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The company said it will have $206 million in special charges for the second quarter. That includes $137 million for integration costs such as combining computer systems, painting planes, and training workers. It paid out $76 million for severance and other benefits, and sold three planes for a gain of $7 million.
United also posted a smaller-than-expected increase in passenger revenue for June. Every month, airlines reconcile the tickets they expected to be used that month with the tickets that were actually used. United said the second-quarter adjustment was bigger than usual. As recently as July 10, the airline said it expected June per-seat passenger revenue to rise 5 to 6 percent. On Tuesday, it said that revenue measure rose just 3.5 percent in June and 3 percent for the full quarter.
"Today's accounting adjustment is disappointing as it is one in a decently long line of integration-related misses by UAL," UBS analyst Kevin Crissey wrote in a note. He cut his estimate for second-quarter earnings to $1.53 per share, down from $1.70.
Shares of the Chicago-based company fell 83 cents, or 3.9 percent, to $20.72 in morning trading amid a broader market decline.
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