=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2004/01= /28/BUGCJ4J76P1.DTL ---------------------------------------------------------------------- Wednesday, January 28, 2004 (SF Chronicle) Net loss narrows at UAL/4th-quarter results much improved after operating c= uts David Armstrong, Chronicle Staff Writer United Airlines posted much-improved fourth-quarter results on Tuesday, narrowing its net loss to $476 million from a staggering net loss of $1.5 billion in the same quarter in 2002, when the company was spiraling into Chapter 11 bankruptcy. UAL Corp. of Chicago, the airline's parent company, reported a $135 million loss in operating costs, down from a $994 million operating loss in the year-ago quarter. Among other things, the airline said it had slashed operating costs by 17 percent over the year, due chiefly to concessions on pay and work rules from its six major unions. UAL, which has 11,000 employees in Northern California, also enjoyed a 10 percent increase in passenger revenue per seat from its very slow fourth quarter of 2002, and by selling its stakes in the online travel outfits Hotwire and Orbitz. Additionally, United filled 76.9 percent of the seats on its aircraft in the fourth quarter, up from 72 percent a year earlier. The number of passengers slipped 1 percent at the same time United reduced its flight capacity by 7 percent. "Through relentless hard work, creative problem-solving and dedication to our customers, we are building a dramatically different company," UAL Chairman, President and Chief Executive Officer Glenn Tilton said. "Our work is not done yet," Tilton said. "We will continue to make the tough decisions to successfully exit from Chapter 11 in the first half of this year." For all of 2003, United lost $2.8 billion, down somewhat from a loss of $3.2 billion in 2002. United's fourth-quarter performance "met expectations. It's not good, but it's heading in the right direction," said Philip Baggaley, an airline analyst for Standard & Poor's. He noted the improvement was compared with an especially poor fourth quarter in 2002, when United, the world's second-largest airline and the dominant carrier at San Francisco International Airport, "was sliding into bankruptcy amid massive publicity." United, he said, still faces a challenge from high pension payments for retirees, including medical benefits that the company has said may be restructured in Bankruptcy Court. Some unions have strongly opposed the reductions in medical benefits for former employees, some of whom took early retirement with the understanding that their benefits were locked in. The Association of Flight Attendants said Tuesday that it will picket at airports, including SFO, on Monday to protest the planned cutbacks. But reducing pension benefits, Baggaley noted, will be crucial for persuading the Air Transportation Stabilization Board to grant the carrier $2 billion in federal loan guarantees, to help it emerge from Chapter 11. Additionally, United will begin operating Ted, its low-fare carrier, on Feb. 12, in a bid to raise revenue and recapture market share it lost in recent years to nimble competitors such as Southwest Airlines and JetBlue Airways. United also reported improved international travel bookings for February and March of this year, without offering specifics. SFO, which offers extensive service to Japan, China and elsewhere in Asia, is traditionally United's most profitable hub for overseas travel. E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx=20 ---------------------------------------------------------------------- Copyright 2004 SF Chronicle