how can be so screwed up one.... fuel is such an important component of airline operations...to imagine, they have such an incompetent group who manages their hedges against CL fluctuation and can actually mess this up so badly...
UAL Q4 loss widens on fuel hedging losses; to cut addl. 1,000 jobs - Update
1/21/2009 10:47 AM ET
(RTTNews) - Air carrier UAL Corp. (UAUA), the parent company of United Airlines, announced Wednesday morning that loss for the fourth quarter widened from last year, impacted by losses on fuel hedge contracts. However, the company insisted it was hopeful that it can regain momentum in 2009. Further, the company issued capacity outlook for the first quarter and fiscal year 2009.
Additionally, United Airlines said it initiating further steps this year in order to reduce overhead costs, citing lower demand and capacity. In addition to the 1,500 positions the company announced in the second quarter, United Airlines intends to further reduce the number of salaried and management employees by about 1,000 positions by the end of 2009. The total workforce reduction of 2,500 positions reflects nearly 30% cut in the company's salaried and management workforce since 2008.
In a statement, senior vice president and chief financial officer, Kathryn Mikells said, "United, like many airlines across the industry, experienced significant cash pressures associated with fuel hedge positions in 2008 as oil prices declined more than $100 a barrel. The cash impact, while significant, is now behind us, and we are well positioned to manage through a challenging 2009 with good expected cost performance building on our momentum from this past year."
Fourth Quarter Results
The Chicago, Illinois-based company reported a net loss of $1.30 billion or $9.91 per share for the fourth quarter, wider than $0.05 billion or $0.47 per share in the prior-year quarter.
The company said that during the latest fourth quarter it recorded non-cash, net mark-to-market losses on its fuel hedge contracts of $566 million or $4.30 per share, and impairments, special items and other charges of $187 million or $1.39 per share.
Excluding items, the company's adjusted net loss for the latest quarter would have been $555 million or $4.22 per share, compared to a profit of $57 million or $0.47 per share in the corresponding quarter last year.
On average, eleven analysts polled by First Call/Thomson Financial expected the company to report a loss of $4.42 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Total operating revenues for the fourth quarter fell 9.6% to $4.55 billion from $5.03 billion in the same quarter last year, but topped by a whisker, the eight Wall Street analysts' consensus estimate of $4.54 billion.
Passenger revenue from UAL's primary subsidiary, United Airlines, decreased 10.1% to $3.41 billion, and passenger revenue from regional affiliates declined 1.7% to $752 million. Total cargo revenue for the quarter fell 19.3% to $180 million from the comparable quarter of 2007.
