The holding company for United Airlines (search) reported a record third-quarter net loss Monday of $1.77 billion, citing the heavy costs of restructuring its aircraft leases as it nears the completion of its three-year bankruptcy overhaul.
UAL Corp. (UALAQ.OB) characterized the $1.7 billion in non-cash aircraft restructuring costs as "common" for a company in the final stages of a Chapter 11 reorganization and said it had operating earnings of $165 million for the period despite higher fuel expenses.
Nonetheless, it was the company's 21st consecutive quarter in the red and topped its previous biggest loss of $1.47 billion for the fourth quarter of 2002, when it filed for bankruptcy.
The net loss for the July-through-September period amounted to $15.26 per share and compared with a loss of $274 million, or $2.38 per share, a year earlier.
Operating revenues rose 8.1 percent to $4.7 billion from $4.3 billion.
The Elk Grove Village, Ill.-based company said the aircraft restructuring charges were based on its creditors' claims and are expected to be settled for a fraction of those amounts. It said it thus expects to record a large gain when it exits bankruptcy early next year.
Excluding the total of $1.8 billion in restructuring costs for the period, UAL said it would have had a net profit of $68 million. Operating earnings (search) were $245 million better than the result from the third quarter of 2004, it said.
"The results we are reporting make it clear that we have done well this quarter in overall cost control, especially given the significant reduction in capacity," said Glenn Tilton (search), United's chairman, CEO and president. United has been in Chapter 11 bankruptcy since December 2002. It is forecasting a profit next year for the first time since 2000, although that is based on a business plan that envisions crude-oil prices averaging $50 a barrel — more than $10 below the current level.
The company has lost $14.2 billion since last turning a profit in the second quarter of 2000, including $9 billion since entering bankruptcy.