United Airlines said Tuesday it lost $382 million during the first quarter as it raced passengers to see who could pull back faster on flying. Passengers won, though United has been aggressively cutting costs to try to keep up.
United reduced flying by 11.3 percent during the quarter that ended March 31. But traffic fell 13.2 percent. The percentage of seats filled fell by 1.7 percentage points.
United said demand fell across all types of travel, but it was especially hurt by a 30 percent drop in first- and business-class travel.
The loss reported Tuesday by the unit of UAL Corp. was $2.64 per share, versus a loss of $549 million, or $4.55 per share during the same period last year. United said it lost $579 million, or $4 per share, not counting non-cash hedging gains and some accounting charges.
Revenue fell 21.7 percent to $3.69 billion, from $4.71 billion a year ago.
Analysts surveyed by Thomson Reuters were expecting a loss of $4.45 per share on revenue of $3.8 billion.
JPMorgan analyst Jamie Baker wrote in a note that United’s $4 per share adjusted loss “contained no substantive surprises” compared with the $4.37 per share loss he had been expecting. But he said the consensus expectation of a loss of $1.40 for the year “appears to be a stretch, appearing to require significant revenue recovery for which there is no evidence yet, in our view.”
United has been working to get costs in line with reduced flying, and it cut $1.1 billion in overall expenses compared with the same quarter last year. It raised nearly $500 million by maneuvers such as borrowing against planes and engines, moving a cargo facility in Chicago and issuing equity.
United ended the quarter with $2.46 billion in unrestricted cash, up $418 million from the end of 2008. The carrier has scheduled debt and capital lease payments of $665 million for the rest of the year.
United collected $259 million during the quarter on fees for things such as charging for more desirable seats, checked bags, and ticket changes ? an average of $14 in fees per passenger.
United said it would reduce mainline flying 9 percent to 10 percent for all of 2009. It said it doesn’t plan additional reductions, but said that could change.
“In this environment, flexibility is key,” Chief Financial Officer Kathryn Mikells wrote in a message to employees. She said the company has “both the willingness and ability to do more if needed.”
It has reduced its budget for non-aircraft capital spending by $100 million, to $350 million for 2009.
Cargo revenue fell 43.1 percent to $124 million.
UAL shares rose 73 cents, or 12.4 percent, to $6.60 in midday trading.
Copyright 2009 The Associated Press.