Elk Grove Village, Ill. – United Airlines’ holding company reported a $698 million net loss Wednesday for the month of October, continuing to lose money as it nears the completion of a nearly 3-year- old overhaul in bankruptcy.
UAL Corp. said the loss consisted of $584 million in reorganization expenses that resulted from the termination of its pilots’ defined-benefit pension plan.
It blamed the rest of the deficit on a 53 percent rise in fuel prices from October 2004 that caused the company to spend $169 million more on fuel than it did a year earlier.
The operating loss for the month was $71 million, compared with $65 million in the same period of 2004.
UAL said costs for its mainline unit, excluding fuel, were down 4 percent, while passenger revenue rose 9 percent.
The company has reported net losses of $14.9 billion since last turning a profit in the second quarter of 2000, including $5 billion this year and $9.7 billion since it filed for Chapter 11 bankruptcy in December 2002.
But it suggested that the huge recent losses are somewhat misleading, because large non-cash reorganization expenses are common for companies closing in on emergence from bankruptcy.
UAL noted that claims pending against it are expected to be settled for a fraction of the charges recorded, meaning much of the deficit will ultimately be overturned in the form of a multibillion-dollar gain.
