UAL Loss Widens on Fuel Prices; Layoffs Planned
UAL, parent of United Airlines, said its quarterly net loss widened on erosion in the value of its fuel hedge program as oil prices plummeted.
The company said its net loss amounted to $1.3 billion, or $9.91 per share, compared with $53 million a year earlier, or 47 cents per share.
Excluding one-time items, the airline said it lost $4.22 per share compared with Wall Street forecasts for $4.42, according to Reuters Estimates.
The airline industry, battered severely last year by soaring fuel costs, slashed capacity in the fourth quarter to offset that bill and to gain pricing power as economic woes eroded travel demand.
UAL said its revenue was $4.55 billion in the quarter, down 9.6 percent.
The company said it ended the quarter with an unrestricted cash balance of $2 billion.
Additionally, United is taking additional steps in 2009 to reduce overhead costs, the company said in its earnings release.
The company will further reduce the number of salaried and management employees by about 1,000 positions by the end of 2009. This is in addition to the 1,500 positions the company announced in the second quarter. When completed, its salaried and management staff will be cut by about 2,500, or nearly 30%, since the beginning of 2008.
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