United Airlines reported a $382 million first-quarter loss Tuesday in what executives for the nation’s third-largest airline called “a challenging revenue environment.”
“The loss was disappointing,” chief financial officer Kathryn Mikells said.
Fuel hedges arranged last summer when oil prices rose to nearly $150 a barrel, Mikells said, “masked substantial progress we have made elsewhere.”
United, which is the largest carrier at Denver International Airport, cut capacity by 11.3 percent by taking planes out of service and trimming flights, although the same number of cities were served.
Passenger traffic dropped by 13.2 percent, with first-class and business-class travel plummeting 30 percent.
Quarterly revenue dropped 21.7 percent to $3.69 billion, down from $4.71 billion in the first quarter of 2008. Costs were cut by $1.1 billion compared with the same quarter last year.
The quarterly loss was $2.64 per share, less than had been forecast. For the same period last year, the loss was $549 million, or $4.55 per share.
Chief executive Glenn Tilton said service should be strengthened when the U.S. Department of Transportation gives its expected final approval next month for Continental Airlines to join the Star Alliance, a network of cooperative airlines.
Half of United’s 737s have been grounded, Tilton said, and the airline will remove the remaining 737s — the oldest and least fuel-efficient planes in the fleet — by the end of the year.
Labor negotiations began this month with unions representing about 80 percent of United’s 45,800 workers. Tilton described opening talks as “respectful.”
United collected $259 million — or about $14 per passenger — in the first quarter from “ancillary” sources, such as bag fees and ticket changes, said chief operating officer John Tague.
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
