CHICAGO – Bankrupt United Airlines (search) parent UAL Corp. (UAL), struggling with high fuel prices, Thursday posted a quarterly loss of $247 million including reorganization charges mostly linked to aircraft.
United, the world's second-largest airline, has been operating in Chapter 11 protection (search) since December 2002, and last week said it would make no more contributions to its pension plans before getting out of bankruptcy.
The company said it had a second-quarter operating profit of $7 million and ended the period with $2.2 billion in cash, including $838 million restricted for certain expenditures.
The basic share net loss was $2.25, compared with a net loss of $623 million, or $6.26 per share, in the year-earlier quarter.
Revenue rose 30 percent to $4.0 billion mostly due to inclusion of new regional partners flying out of Washington's Dulles Airport and Chicago's O'Hare. They replaced feeder service from Atlantic Coast, which is now operating on its own as Independence Air out of Dulles.
Jake Brace, UAL's chief financial officer, said in a statement that overall performance is still unacceptable.
"Even though we are experiencing strong traffic — in June we reported our highest load factor ever — the pricing environment prohibits us from recouping these high costs," he said.
Fuel costs, an expense hurting all airlines this quarter, were an average $1.18 per gallon in the period, leading to a 14 percent rise in total operating expenses, UAL said.
United, based in Elk Grove Village, Ill., recently reached an agreement to extend its bankruptcy financing with JP Morgan Chase, Citigroup , CIT Group and General Electric Co.'s GE Commercial Finance.
But the company said the terms of the amended loan prohibit it from making any more pension contributions before exiting bankruptcy.
It is studying what to do with the pension plans, which are underfunded by about $4.1 billion. In June the federal government denied United's request for a reduced loan guarantee of $1.1 billion, leaving the airline to search for alternatives.
Also Thursday, the machinists union sought a court order to force UAL to resume pension payments, saying the company cannot continue a "slash and burn" approach to restructuring.
The International Association of Machinists (search) claimed in a suit that company executives breached their fiduciary responsibility by skipping a $72 million contribution this month and announcing last week that the airline would not make nearly $500 million in payments scheduled this fall.
"Clearly, they failed," Robert Roach, the union's general vice president of transportation, said in a statement. "The IAM has a responsibility to utilize all possible measures to protect the interests of our members. We will not fail."