You have been sent this message from psa188@juno.com as a courtesy of the W= ashington Post - http://www.washingtonpost.com=20 =20 =20 =20 To view the entire article, go to http://www.washingtonpost.com/wp-dyn/art= icles/A7026-2003Jan31.html =20 United Airlines Parent Posts Record Loss =20 By Dave CarpenterCHICAGO –– United Airlines' parent company rep= orted a record $1.5 billion loss for the fourth quarter Friday, punctuating= an abysmal year in which it descended into bankruptcy.<P>UAL Corp. lost a = worst-ever $3.2 billion for the year, accounting for roughly one third of t= he industry's combined losses. Only American Airlines did more poorly, spil= ling $3.5 billion in red ink in 2002.<P>If United, the world's second-large= st carrier, does not turn its situation around quickly, analysts say it ris= ks losing critical Chapter 11 financing and increases the possibility of li= quidation.<P>The entire industry has been in crisis since the Sept. 11, 200= 1, terrorist attacks compounded existing problems from an economic downturn= , and recovery prospects remain murky. Major U.S. airlines have racked up $= 3 billion in losses for the fourth quarter and $9 billion for all of 2002. = US Airways, which is also in bankruptcy, is expected to report its results = next week.<P>CEO Glenn Tilton said United did everything within its control= in 2002 to reduce its industry-leading costs and that more "difficult but = critical" changes will be made through the bankruptcy process. He has not y= et disclosed details of the company's blueprint for becoming leaner and pro= fitable again, pledging only that United will "compete aggressively" in 200= 3.<P>That said, the carrier expects another "significant" loss during the f= irst quarter because of lackluster demand from business travelers and weake= r international bookings, especially in the Pacific region, a long-time str= ength for United. A war in Iraq also would worsen the airline's predicament= .<P>"This was the quarter when they were sliding into bankruptcy, so it's n= ot surprising that the results are pretty dismal," said Philip Baggaley, ai= rline analyst for Standard & Poor's Corp., calling the fourth-quarter n= umbers "predictably horrendous."<P>He said United's operating performance t= his quarter will be key in determining whether it meets its first big bench= mark in bankruptcy on Feb. 28. The banks providing United's bankruptcy fina= ncing could demand that United repay $700 million already provided to it if= it hasn't shown strict, specific cash-flow improvement by that date.<P>Bag= galey said it's difficult to gauge whether United is on track to meet the r= equirement. He estimated that United had $1.3 billion in unrestricted cash = at the end of the year.<P>"They got interim labor concessions faster than t= hey expected, but fuel prices are higher and revenue is likely to be weaker= – particularly with war on the horizon – than they expected," he= said.<P>The fourth-quarter deficit left UAL with a net loss of $3.21 billi= on for the year – far beyond its $2.1 billion deficit a year earlier.<= P>UAL's net loss for the last three months of the year was $1.47 billion, o= r $20.70 a share, compared with a fourth-quarter 2001 loss of $308 million,= or $5.68 a share.<P>Excluding certain items, United said the pro-forma los= s was $9.65 per share – better than the $13.81 consensus estimate of a= nalysts surveyed by Thomson Financial.<P>Revenue fell 18 percent to $2.9 bi= llion from $3.5 billion.<P>The loss easily exceeded the carrier's previous = worst result, a $1.16 billion setback for the third quarter of 2001, when t= he attacks accelerated United's losses and threw the industry into a tailsp= in from which it has yet to recover.<P>It was United's tenth straight quart= erly loss. Since last turning a profit in the second quarter of 2000, the a= irline has lost $5.5 billion.<P>Airline analyst Ray Neidl said it was prema= ture to judge United's emerging new business strategy until details are rel= eased. The pilots' and flight attendants' unions have denounced that plan, = which is expected to include the creation of a discount airline, as tantamo= unt to a breakup of United.<P>"An airline within an airline has never worke= d before," said Neidl, of New York-based Blaylock & Partners. "But in b= ankruptcy you've got a lot more latitude to put together an operation that = could work," he said, including the ability to establish separate managemen= t and employees and a lower cost structure.<P>He said United's employees ma= y "come around to reason when they look at the alternative, which is total = liquidation."<P>For the year, the net loss amounted to $53.55 per share, co= mpared with a year-earlier loss of $40.04 a share. Revenues sank 11 percent= to $14.3 billion from $16.1 billion.<P>UAL shares fell 4 cents to $1.03 in= afternoon trading on the New York Stock Exchange.<P>–––<P>O= n the Net:<P>www.united.com