United Airlines reports large Q1 loss
United Airlines has reported first quarter losses of $510million and said the industry still has “a long way to go” before it recovers from the economic downturn and the impact of the September 11 terror attacks.
It compares to a loss of $313million for the same period in 2001. Operating revenues were $3.3 billion, down 26% from the same period last year. However United pointed out that this was better than the Q4 2001 performance when operating revenues fell by 39%. Even so, United said it expects to make a “significant second quarter loss” and also make a loss in the full year.
Chief executive John W. Creighton said: “We certainly are seeing signs that our industry’s situation is beginning to improve, but there still is a long way to go.”
He also suggested that employees should expect further wage cuts, saying: “When I came to United last October, we focused on getting the airline back on the road to financial stability. It was my hope that we could put in place a four-plank recovery plan as soon as possible, and we have definitely made progress. We’ve reduced our operating and capital budgets in every way possible, boosted our cash position and we are focused on generating revenue with all means available to us.”
He added: “However, complications with negotiating open labour contracts have impeded our progress on reducing salary and other operating costs. Even though this has slowed us down, we will continue working to get our costs in line with our revenues.”
American Airlines, Continental, Delta, Northwest Airlines and US Airways have already reported large losses for the first quarter of the year.
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