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United Q2 losses hit $1.4 billion
Charges related to a planned exit from Chapter 11 bankruptcy protection this autumn left United Airlines with a quarterly loss of $1.4 billion.
Almost all of the deficit in the second quarter was down to “reorganisation items” as the US carrier seeks to re-emerge from bankruptcy.
The overall net loss came out at $26 million, excluding the reorganisation charges, from $103 million last year.
United was hit by rising oil prices, giving a bill for the three months $262 million higher than the same period last year.
At the same time the airline managed an improvement in operating profits, up from $7 million a year ago to $48 million.
Chairman, chief executive and president Glenn Tilton said: “We now have the foundation in place that enables us to continue to build a much more competitive enterprise.
“We have reduced United’s costs, we are posting industry-competitive revenue performance and our employees are delivering excellent operational performance.
“Although the harsh enconomic environment, including very high fuel costs, presents difficult challenges for the industry, United’s restructuring has earned us the opportunity to compete for a place among the leading network carriers.”
Meanwhile, United warned flight attendants threatening strike action over the termination of pension plans that any disruption “will not be tolerated”.
A statement by the airline in reaction to action planned by the Association of Flight Attendants said: “United will do whatever is necessary to ensure the continued smooth operation of the company for our customers.
“While every other union at United has recognised the need to terminate and replace pension plans in order for United to successfully complete its restructuring, the AFA leadership has simply refused to accept reality and negotiate a replacement plan on behalf of its members.”
Report by Phil Davies
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