United Airlines parent UAL Corp. lost $1.8 billion in the third quarter of the year, its largest loss ever.
The loss, which came to $15.26 a share, was far wider than United’s year-ago loss of $274 million, or $2.38 a share.
According to United, nearly all of this year’s third-quarter loss was due to reorganization expenses, in particular the accounting for aircraft cost restructuring. Excluding the reorganization items, United said it would have made a $68 million net profit in the quarter.
Fuel, now United’s largest expense surpassing labor, cost United $1.1 billion in the quarter, up from $805 million a year ago.
The company has been operating under Chapter 11 bankruptcy protection for nearly three years and plans to exit in February. It is the largest carrier at Denver International Airport and has about 5,400 employees in the Denver area.
“The fuel cost obviously got them,” said Helane Becker, an analyst at the Benchmark Co. But because United showed a net profit excluding reorganization expenses, “I think they did a very good job,” Becker said.
United forecasts a profit next year. However, Becker said, “I don’t think any of the airlines will be profitable next year.”
United’s $1.8 billion in reorganization expenses included $1.7 billion for aircraft rejection charges, which the company said are “non-cash” and do not affect its cash position. The company reached a major settlement in the third quarter on aircraft cost restructuring. United said it expects to settle claims for a “minor fraction” of the charges it recorded for its third-quarter earnings.
One of United’s priorities in its reorganization was cutting aircraft costs. The airline has shrunk its fleet and cut back on flight capacity this year.
United said its operating earnings in the quarter totaled $165 million, compared with a $80 million loss in the year-ago quarter. Operating revenues came to nearly $4.7 billion, up from $4.3 billion a year earlier.
Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or at kyamanouchi@denverpost.com.
