United posts billion dollar loss, will cut more jobs

UAL, the parent company of United Airlines, has announced a net loss of US$1.3 billion for the fourth quarter of 2008, on the back of losses made on fuel hedges and a deepening credit crisis.

Taking out the loss made on fuel hedges, United reports that it would have made a loss of US $547 million.

At the same time, United Airlines announced its intentions to cut 1,000 more jobs from its workforce by the end of 2009, adding to those previously announced job losses.

“Last year was by any measure a challenging year - defined by unprecedented volatility and unpredictability, but for United it was also characterized by steady and durable improvements,” said Glenn Tilton, United Airline Chairman, President and CEO.

Fuel prices continue to be the largest contributing factor to costs, with the rapid decline of fuel placing a $2.9 billion burden on costs due to hedging contracts made while the prices were high.

“Our industry continues to be challenged by a volatile fuel and revenue environment, and against that backdrop, we are delivering strong cost results even as we reduce capacity and improve quality,” said John Tague, United Executive Vice President and COO.

Revenues for the quarter were also down, reaching US$4.55 billion while 2007 managed to record US$5.03 billion.