UAL Aims to Cut More Costs

Updated from 7:26 a.m. EDT

United Airlines parent UAL (UAUA Quote) reported a first-quarter loss that was little changed from a year ago and said it will now focus on improvements that include cutting expenses by $700 million annually.

The nation's second-largest airline, which emerged from bankruptcy protection on Feb. 1, said that excluding reorganization items it lost $306 million during the quarter ended March 31, compared with a loss of $302 million in the same quarter a year earlier. Revenue totaled $4.47 billion, up 14% from $3.92 billion a year earlier.

On an operating basis, United reported a first-quarter loss of $171 million, a $79 million improvement over last year despite a $314 million increase in fuel expenses for its mainline and regional operations.

United didn't report a per-share figure for the full quarter, but said it lost $1.95 a share during February and March. On paper, the airline reported a $23 billion profit for the quarter, primarily reflecting accounting for expenses that were shed in bankruptcy.

"The company is ready to put the distractions of restructuring behind us and focus our full attention on margin improvement and reducing costs, realizing our revenue potential and unlocking the full value of (our assets)" said CEO Glenn Tilton during a conference call with analysts. "Our controllable costs for the quarter do not yet reflect United operating at our most efficient level."

For the quarter, mainline revenue per available seat mile was 11.01 cents, up 11.2%, below the industry average gain of about 14% for the quarter. Yield, or revenue per revenue passenger mile, was 11.82 cents, up 9.1%, largely as a result of improved ticket prices.

United's cost per available seat mile was 11.42 cents, up 11.1%, mostly because of fuel-price increases. CASM excluding fuel was 8.03 cents, up 3%.

Shares of UAL were dropping $3.12, or 8%, to $35.85 after the quarterly report.