Chicago – United Airlines’ parent corporation said Thursday it lost $1.43 billion during the second quarter, nearly all of which was related to its ongoing effort to exit bankruptcy this fall.
The carrier said it recorded a $1.4 billion charge for reorganization items, including $602 million in costs stemming from turning over its employee pension plans to the federal government’s pension insurer.
Bankruptcy protection most likely will shield United from paying more than a small fraction of the restructuring costs, the company said.
Separately, United’s flight attendants picketed at about 20 airports worldwide Thursday to protest the transfer of their pension plan to the Pension Benefit Guaranty Corp.
The carrier has lost more than $7 billion since it entered bankruptcy in December 2002. Excluding the reorganization costs, United’s operating earnings grew to $48 million in the quarter from $7 million last year – despite $262 million in higher fuel costs.
United chief executive Glenn Tilton pointed to United’s 5 percent revenue growth – to $4.42 billion from $4.19 billion in the year-ago period – and 3 percent reduction in nonfuel costs as signs that the airline has become more competitive.
Airline analyst Michael Boyd said United’s operating profit is encouraging. But he said United must prove it can continue its momentum when it no longer has bankruptcy protection.
In picketing the transfer of pension obligations, the Association of Flight Attendants contends the move violated its labor contract and has threatened so-called CHAOS strikes.
“The United States Senate has been slow to act for the rights of every United Airlines employee who deserves a dignified retirement for a lifetime of service,” Greg Davidowitch, president of the Association of Flight Attendants at United Airlines, said in a statement.
At Denver International Airport, about 15 flight attendants and a handful of other union representatives picketed near a curbside check-in area, chanting and holding up signs with slogans such as “CHAOS could strike at any moment” and “UAL senior management must go.”
“We’re angry and just trying to convey to the public what’s going on,” said Erin Bassity, a United flight attendant and council representative for the union. “This is something that could potentially affect their flight” if flight attendants go on strike.
United noted Thursday that its other labor groups have “recognized the need to terminate and replace pension plans” and said the flight attendants association leadership “has simply refused to accept reality.”
The carrier said strikes would be illegal under federal law, and it would do anything necessary to ensure smooth operations.
Travelers at DIA were mixed in their reception of the flight attendants’ picket.
“I can understand their frustration,” said Tony DiTirro of Denver. But, he said, “I don’t know there’s a whole lot I can do.”
Sue Myers, who lives in San Ramon, Calif., said she thinks what is happening with the flight attendants’ pensions is wrong.
“I’m for whatever they need to do to get what is rightly theirs,” Myers said. But a surprise strike could cause problems for travelers. “When you have a schedule and you need to get somewhere, you think about yourself,” Myers said.
Denver Post staff writer Kelly Yamanouchi contributed to this report.
