United Continental Airlines CFO John Rainey speaks during the Reuters Aerospace and Defense Summit in Washington September 5, 2013. REUTERS/Gary Cameron
(Reuters) - United Airlines (UAL.N) expects to dip into its cash pile to help fund the purchase of new aircraft this year and rely less on debt financing, reflecting the U.S. airline industry's dramatic financial turnaround, the carrier's Chief Financial Officer John Rainey said in an interview.
United, which had about $4.4 billion cash on hand at the end of last year, may use some of that to pay for about half of the cost of individual planes, while borrowing the rest, he said.
There are 25 planes entering its fleet in 2015 that it has yet to finance. Another 22 already have financing in place.
While cash-rich companies have been under pressure from shareholders to increase dividends, United, the fourth-largest U.S. carrier by market capitalization, has said it is focused on finishing a $1 billion share buyback program and that there are no current plans to restore a dividend. It last made a payout to shareholders in 2008.
How to efficiently use excess cash is a relatively new issue for U.S. airlines.
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