UAL

(UALAQ.OB)

, the parent of United Airlines, flew deeper into the red during the fourth quarter, as the nation's second-largest airline continued to struggle under bankruptcy protection.

The Chicago-based carrier posted a net loss of $664 million, or $5.73, including items, compared with $476 million, or $4.33 a share, in the year-ago period. Excluding items, UAL lost $553 million, or $4.77 a share, vs. $252 million, or $2.30 a share, a year ago.

Operating revenue rose 5% to $4.0 billion. Traffic increased 5% while capacity rose 4%.

Analysts had expected a loss of $623 million, or $5.41 a share, on revenue of $3.76 billion.

UAL has been operating under Chapter 11 bankruptcy protection for more than two years now and is working hard to cut costs under difficult circumstances.

"As expected, the industry environment continues to be extremely difficult," the airline said. "Record fuel prices and pressure on revenue led to unacceptable results. United has made good progress with more cost reductions already under way. But as we have said, and as this quarter shows without question, we have more work to do."

UAL said it had made "meaningful progress" toward its target of $2 billion in savings from labor, nonlabor and pension costs on top of the $5 billion in average annual savings it had previously announced.

Special items in the quarter included a $158 million gain from the sale of UAL's remaining shares of Orbitz and $222 million in reorganization expenses.

The company ended the quarter with unrestricted cash of $1.3 billion and restricted cash of $877 million.