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United Flying Right

It's tough to blame investors for taking the hatchet to United Airlines parent UAL (Nasdaq: UAUA  ) yesterday. After reporting yet another quarterly loss, it probably seemed like the same old story. Here's my impression of the water-cooler talk:

Joe: "Hey, did you hear United reported another quarterly loss?"

Bob: "Shocking. Guess it's time for me to sell."

Many did. UAL's shares fell by more than 8% as of yesterday's close. They're recovering somewhat today, with lower oil prices apparently boosting every stock in the sector. Even US Airways (NYSE: LCC  ) , which today is faced with convincing a skeptical U.S. Congress that its effort to acquire Delta Air Lines is good for the industry, is up slightly as I write this.

Still, the airline's seeming underperformance on the top line stung investors and hurt United. It booked $4.6 billion in revenue for the quarter, when the Street was looking for $4.7 billion.

Really? Call an ambulance! This patient needs a doctor, stat!

Or not. A closer review of the numbers shows that, even after losing an estimated $40 million due to storm-related flight cancellations, the company generated $23 million in operating income.

What's more, looking at the critical traditional airline measures "cost per available seat mile" and "revenue per available seat mile" -- UAL lowered costs by 0.7% in the quarter and improved revenue by 5.9%. For the full year, which included one month of operating under bankruptcy protection, it improved revenue per available seat mile by 9%. And that's impressive.

And it gets better. Even with cancellations, United flew 39,288 seat miles during Q4, up 2.7% from the year-earlier period. That's another critical statistic. Airlines only make money when planes are flying. An increase in available seat miles suggests that, so long as there haven't been major increases in ground staff, crews are working more efficiently to get planes refueled and ready for departure.

Still, all investors saw was a $61 million loss on the bottom line. What a shame. Investing profits can be made in any industry, no matter how bad it may have been in the past. Just ask those who bought into Nucor (NYSE: NUE  ) after the steel industry went bust. They're sitting on multibagger gains as I write.

Today's United might not be the airline industry equivalent of Nucor, but it isn't now-defunct Braniff, either. Investors ought to stop acting like it is.

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Fool contributor Tim Beyers, ranked 954 out of more than 20,700 in Motley Fool CAPS, is addicted to first-class travel, which is why he was dismayed to hear United is changing the rules for its Mileage Plus program. Tim didn't own shares in any of the stocks mentioned in this story at the time of publication. Get the skinny on all of the stocks in his portfolio by checking Tim's Fool profile. Motley Fool's disclosure policy is always on-time for departure.

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