United Airlines' parent company posted a $476 million loss for the fourth quarter, extending its string of money-losing quarters to 14, but cited "significant progress" and said it remains on target to emerge from Chapter 11 bankruptcy by midyear.
The loss reported Tuesday, the biggest in the industry this quarter, left UAL Corp. with a whopping $2.81 billion deficit for 2003, its second-worst ever and only slightly better than the $3.21 billion loss for 2002, when heavy losses forced it to make the largest bankruptcy filing in aviation history.
But chief executive Glenn Tilton said the restructuring actions and improved results are building a "dramatically different" company under the protection of federal bankruptcy court — one more focused on costs and customers than before.
The net loss for the final three months of 2003 amounted to $4.33 per share, compared with a loss of $1.47 billion, or $20.70 per share, for the same period a year earlier.
Results included $225 million in one-time charges related mostly to breaking aircraft leases as part of its cost-cutting restructuring. Excluding those items, the loss was $251 million, or $2.30 per share. Analysts surveyed by Thomson First Call had expected a per-share loss of $2.58.
Revenues rose to $3.62 billion from $3.47 billion, including a 10 percent increase in passenger revenue over a year earlier.
Tilton cited an improved operating loss of $135 million in the fourth quarter as evidence of United's success in cutting costs and raising revenue. The company also reduced unit costs by 17 percent and ended the quarter with a cash balance of $2.4 billion.
In December, the company had a net loss of $272 million, including $155 million in restructuring items.
United's results reflect those of the major U.S. carriers as a whole for the quarter: continuing losses, but fewer of them. No. 1 American and No. 3 Delta reported net losses earlier this month of $111 million and $332 million, respectively, while Northwest, Continental and Southwest — the nation's fourth, fifth and sixth biggest airlines — all finished in the black.
Ray Neidl, an aviation analyst for Blaylock & Partners, said No. 2 United is progressing in its bankruptcy but still has work to do.
"They're under control, operating-wise," Neidl said. "Financially, they still have a big fence to climb with the unfunded pension liability."
United has pension obligations of some $4.8 billion over the next five years. Hoping to reschedule those payments, it is lobbying for a bill in Congress that would effectively enable airlines to defer payments. It also has asked the Internal Revenue Service for a waiver that would extend the timetable for required contributions.
For the full year, the loss amounted to $27.36 per share, compared with the record loss a year earlier of $3.2 billion, or $53.55 per share. Revenues were $13.72 billion, down 4 percent from $14.29 billion.