United parent to cut work force after big loss

MINNEAPOLIS - United Airlines parent UAL Corp. said Tuesday it lost $2.73 billion in the second quarter on a combination of accounting charges and high fuel prices, and said it would reduce its work force by 7,000 people by the end of 2009 as it permanently reduces the amount of flying it does.

The nation's second-largest airline said it lost $21.47 per share compared with a quarterly profit last year of $274 million, or $1.83 per share.

Revenue rose 3 percent to $5.37 billion, from $5.21 billion a year ago.

United's loss included a non-cash special accounting charge of $2.3 billion.

Analysts surveyed by Thomson Financial expected UAL to lose $2.05 per share on revenue of almost $5.39 billion. Analysts' estimates generally exclude one-time charges. United lost $1.19 per share without the accounting charges.

United previously announced plans to eliminate roughly 3,800 jobs through furloughs, layoffs, and early retirement packages. But on Tuesday it said it would aim to eliminate 7,000 jobs by the end of next year in conjunction with reducing its flying. The company did not specify which jobs would be targeted.

United previously said it will eliminate 100 aircraft, including all of its 737s.

"Our industry is challenged as never before by the unrelenting price of oil, and United is taking aggressive action to offset unprecedented fuel costs and to strengthen the competitiveness of our business," Chairman, Chief Executive and President Glenn Tilton said in a statement.

The airline said its fuel expense rose 53 percent to $1.8 billion for the quarter.

United said it raised $550 million in cash by mortgaging aircraft and other debt maneuvers. It ended the quarter with $2.9 billion in cash, not counting money pledged in loans or as collateral on fuel hedges. The carrier said it has another $3 billion worth of assets it can borrow against.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.