United Airlines parent posts record loss CHICAGO (Reuters) =97 United Airlines parent UAL on Friday posted its= largest=20 annual net loss ever, $3.2 billion for 2002, after filing for bankruptcy=20 protection in December. The enormous loss was just a tad less than the=20 record $3.5 billion loss recently posted by the world's largest airline=20 company, American Airlines' parent AMR. But UAL's annual net loss was 50%=20 larger than its previous record loss, $2.1 billion or $40.04 per share in=20 2001. The per-share net loss for 2002 was $53.55. Full-year revenue dropped= =20 12% to $14.3 billion. After drawing down $700 million from a special loan=20 facility called debtor-in-possession financing, United ended the fourth=20 quarter with $1.9 billion cash on hand, including $580 million in cash=20 restricted for certain expenses. "The positive surprise was they had more cash than I thought they would,"=20 said Richard Bittenbender, senior credit officer at Moody's rating agency.= =20 "What continues to be a concern is the relationship between revenue and=20 costs. The cost side is still of concern," he said. For the fourth quarter= =20 of 2002, UAL's loss was $1.5 billion or $20.70 per share. Revenue rose to=20 $3.5 billion from $2.9 billion in the year-ago period but total operating=20 expenses for the quarter rose 16%. STILL NO NEWS ON NEW LOW-COST CARRIER United is preparing to unveil a business plan to help it emerge from=20 bankruptcy. A low-cost carrier is in the works, but details on=20 destinations, the type of planes to be used, pricing and staffing needs=20 have been scarce. Creditors of the airline have the plan in hand, but so=20 far it has not been made public to employees or passengers. United's pilots= =20 and flight attendants are already criticizing the idea of a low-cost=20 carrier. As the bankruptcy process continues, unions are working under=20 temporary wage cuts that save UAL $70 million per month. Negotiations about= =20 longer-term changes to labor union contracts are ongoing. The task is=20 particularly difficult for United, which has a long history of labor=20 trouble despite being employee-owned. United, based in Elk Grove Village,=20 Illinois, spent much of 2002 trying to get reluctant labor unions to come=20 up with cost savings that would help win backing for a federal loan=20 guarantee and avoid bankruptcy =97 often via round-the-clock negotiations.= =20 The eventual labor coalition package of concessions, around $5 billion, was= =20 much smaller than what the Air Transportation Stabilization Board was=20 seeking, and the agency denied United's application for guarantees of $1.8= =20 billion of a $2.0 billion private sector loan. Shortly thereafter, the=20 airline filed for bankruptcy upon arranging a $1.5 billion DIP loan from=20 J.P. Morgan Chase, Citigroup, CIT Group and Bank One Meanwhile, American=20 Airlines, based in Fort Worth, Texas, is also struggling like other major=20 U.S. carriers to turn the tide of enormous financial losses. "The two=20 largest carriers are clearly having similar problems with their=20 profitability," Bittenbender said. UAL shares were at $1.09 in premarket=20 Instinet trading, after closing Thursday at $1.07 on the New York Stock=20 Exchange. The shares dropped more than $12 in 2002 after trading above $100= =20 in the late 1990s. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: www.pichemas.com TnT Webdirectory: http://search.co.tt *********************************************************