United Airlines posts rise in fourth-quarter net losses; to cut 1,000 more jobs

UAL Corporation, the parent company of United Airlines, headquartered in Chicago, the United States, has reported that its fourth-quarter net losses have risen because of increased fuel-hedging losses and declining revenue.

United Airlines said it also would eliminate another 1,000 salaried and management jobs by the end of 2009.

These additional job cuts would bring the total reduction in United Airlines’ salaried and management staff to about 2,500, or nearly 30%, since the beginning of 2008.

In a statement, United Airlines, the third largest United States-based airline, said its  quarterly net loss expanded to $1.3 billion after the carrier paid “above-market rates” for fuel after “incorrectly betting that prices would rise.”

The company’s fourth-quarter net loss of $9.91 a share compares with a loss of $53 million, or 47 cents a year, earlier. Excluding costs tied to fuel-hedging contracts and other items, the loss was $555 million, or $4.22 a share, the statement said.

John Tague, chief operating officer of United Airlines, said in the statement that the carrier’s decision to cut more management and salaried jobs “reflects efforts by carriers to control costs and conserve cash as demand declines in the recession.”

United Airlines’ total job cuts would come to 9,000 by the end of 2009.

The carrier had earlier done away with 1,500 management positions and now it says that it is poised to cut 6,500 “unionised” jobs – which is more than its initial forecast in 2008 of cut in 5,500 unionised jobs. In most cases, employees who are members of unions accepted voluntary furloughs or leaves, the airline said.

In addition to job cuts, United Airlines lines plans to trim its main jet fleet by 9.5% in 2009 – which is down from an initial planned cut of 11%. The carrier’s capacity will drop by 8% when regional airline partners are included, the statement said. “These

changes,” United Airlines explained, “are a result of fine-tuning the timing of removing 100 planes from its fleet by the end of 2009.” The airline had removed 51 from its fleet in 2008.

The company said it expects to raise about $350 million in new liquidity by the end of this quarter, including $160 million from an agreement to relocate a cargo facility at Chicago’s O’Hare International Airport, which is United Airline’s biggest hub.

United Airlines also has hubs in Denver International Airport, Washington Dulles International Airport, San Francisco International Airport, and Los Angeles International Airport.