This article from NYTimes.com has been sent to you by psa188@juno.com. /-------------------- advertisement -----------------------\ Enjoy new investment freedom! Get the tools you need to successfully manage your portfolio from Harrisdirect. Start with award-winning research. Then add access to round-the-clock customer service from Series-7 trained representatives. Open an account today and receive a $100 credit! http://www.harrisdirect.com/b4.htm?OINYT100C \----------------------------------------------------------/ UAL Loses $510 Million, as Upturn Is Only a Glimmer April 20, 2002 By EDWARD WONG The UAL Corporation, the parent company of United Airlines, reported a wider first-quarter loss yesterday, capping a torturous three months for the airline industry in which business and leisure travelers continued to avoid flying because of the Sept. 11 attacks and the general economic downturn. UAL posted a net loss of $510 million, or $9.22 a share, compared with a net loss of $313 million, or $5.97 a share, a year earlier. Revenue declined 26 percent, to $3.29 billion. Excluding $52 million in costs to close Avolar, its business-jet unit, $29 million in proceeds from selling shares of the Cendant Corporation and an accounting change, UAL had a loss of $487 million, or $8.81 a share. On that basis, analysts had expected UAL to report a loss of $10.24 a share, Thomson Financial/First Call said. But the latest results are still a huge blow to UAL, the country's second-largest carrier, which ended last year with a $2.1 billion loss, the largest in airline history. Eight of the country's nine largest carriers reported first-quarter losses this week that totaled nearly $2.5 billion, compared with $3.2 billion of losses for the fourth quarter last year. The AMR Corporation, the parent company of American Airlines, reported the biggest loss - $575 million, or $3.71 a share. No industry was hit harder after the Sept. 11 attacks, and no company within the industry has struggled more than United. Like its competitors, United is coping with a large decline in the lucrative business travel market, which is only now showing hints of recovery. At the same time, its executives are trying to win concessions from a labor force that owns a majority of the company's shares and has for decades opposed cuts in salaries and benefits. "We certainly are seeing signs that our industry's situation is beginning to improve, but there is still a long way to go," John W. Creighton, UAL's chief executive, said in a written statement yesterday. "We've reduced our operating and capital budgets in every way possible, boosted our cash position, and we are focused on generating revenue with all means available to us. However, complications with negotiating labor contracts have impeded our progress in reducing salary and other operating costs." United has been hesitant to push hard for concessions from its employees until it reaches a contract settlement with a union representing 23,000 baggage handlers and customer service workers. On the revenue-generation front, the company raised scattered leisure fares by $20 on Tuesday night, a move that was matched by Northwest. But the increase was not as bold as that of American Airlines, the country's largest carrier, which raised leisure fares across the board by $20 on Wednesday. The move was matched by late afternoon yesterday by Delta, Continental and US Airways, said Tom Parsons, chief executive of Bestfares.com, which sells discounted tickets. Last week, Continental tried the same $20 systemwide increase. Several airlines followed suit but retreated to lower fares after Northwest refused to raise its fares. That company, along with United, has yet to announce a systemwide increase. Although demand for seats will undoubtedly increase this summer as the major airlines continue to fly at lower capacities, experts debate whether potential passengers - especially those business travelers who have turned to cut-rate airlines during the economic slump - will be willing to pay higher prices. "Part of the problem with airline pricing today is that various carriers have some very serious beliefs," Rono J. Dutta, president of UAL, said yesterday in a conference call with analysts. "So we're looking for a middle ground right here." UAL did show some signs of a financial upswing, especially in its improved cash-burn rate. In the first quarter, the rate dropped to less than $5 million a day, half of what it was in the fourth quarter. UAL ended the first quarter with $2.9 billion cash in hand, $300 million more than at the end of the fourth quarter. "It's still scary times for everybody," said Glenn D. Engel, an analyst at Goldman, Sachs. "But as the industry recovers, United will participate. I think there has been some more skepticism of United than of other airlines because of its labor problems, but I think that's unwarranted." United executives have invited the leaders of the airline's six unions to meet on Monday at the company's headquarters in the Chicago area to discuss "the employee part of the recovery plan," meaning belt-tightening, said Jake Brace, the chief financial officer. "We recognize that the challenge for the industry is to get our revenues and our costs in line, and we need to have those frank discussions with our unions regardless," he said. Mr. Brace said UAL was considering the option of applying for a federal loan guarantee, which would give it more negotiating power over unions. The deadline is June 28. "It may be useful," he said. "It may be part of the financial recovery plan." Shares of UAL rose 16 cents yesterday, to $15. http://www.nytimes.com/2002/04/20/business/20AIR.html?ex=1020327670&ei=1&en=2d13ffd2323cda81 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company