UAL Cuts 1,100 Jobs After Quarterly Loss
Updated from 10:39 a.m. EDT
Shares in United Airlines parent UAL (UAUA) plunged 37% Tuesday after the carrier missed analysts' estimates for the latest quarter and said it will lay off 1,100 workers.
United lost $537 million in the first quarter, driven primarily by a $518 million increase in fuel costs. The loss was equal to $4.45 a share. Analysts surveyed by Thomson Financial had expected a loss of $3.41. Revenue rose 7.7% to $4.71 billion, but fell short of the consensus Wall Street estimate of $4.75 billion.
In response, United announced staffing and fleet reductions. The carrier said it will cut 500 salaried and management jobs and about 600 union-represented workers by the end of the year.Looking out to the final quarter of the year, UAL said mainline domestic capacity will decrease by approximately 9% during the fourth quarter, on top of a 5% reduction in the same quarter of 2007. Also, consolidated capacity will be 4% lower than it was a year earlier. The lower capacity will be driven by the elimination of 30 older narrowbody aircraft from United's fleet, which is 10 to 15 more planes than the carrier announced in March. "We're taking the necessary steps to become profitable over time," said CEO Glenn Tilton on an earnings conference call. "Industry consolidation is in my mind a component of
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