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United Airlines' parent company reported its second-worst quarterly result ever today.
United posts $1.3 billion
first-quarter loss
CHICAGO >> United Airlines' parent company reported a $1.3 billion net loss today for its first full quarter in bankruptcy -- its second-worst quarterly result ever and the biggest by any airline for the quarter.
UAL Corp. cited a number of factors as contributing to its 11th straight quarterly loss, including the sluggish economy, war in Iraq, SARS, the necessity of low fares and consumers' concerns about United's future.
The world's No. 2 airline said booking trends have improved since the first quarter ended and that it will show dramatic savings in labor costs from the new contracts that took effect yesterday. But it acknowledged that demand remains weak amid the industrywide air travel slump.
The rocky results pushed the total of first-quarter losses for major U.S. airlines to $3.56 billion, on pace to exceed the industry's deficit in the previous quarter. US Airways reports its numbers on Tuesday.
UAL's net loss for the three months ended March 31 was $1.34 billion, or $14.16 per share, compared with a loss of $510 million, or $9.22 a share, for the same period in 2002.
Results included a $248 million charge for reorganization items, primarily a writeoff of lease certificates and a $137 million writedown of its investment in Air Canada, which also has filed for bankruptcy protection.
Excluding those items, the loss was $10.11 a share, beating the consensus estimate of a $12.08 a share loss by analysts surveyed by Thomson First Call.
Revenues were $3.18 billion, down 3 percent from $3.29 billion a year earlier. Passenger revenue was down 8 percent.
The company lost $2 million a day from operations in the first quarter -- a substantial improvement from the second half of last year.
Jet fuel costs were a whopping 46 percent higher than a year earlier. While U.S. and trans-Atlantic bookings are improving, the airline said, bookings in the Pacific remain weak because of SARS.
United did not estimate second-quarter results but said it expects capacity for the year to be lower than previously anticipated. It said the new labor contracts and reduced flight schedule will reduce salaried and related costs by $400 million to $500 million for the quarter, and it also expects significant savings from having renegotiated or abandoned its aircraft leases.
