Then Again... It May Not, Too

Following its report Tuesday of a fourth-quarter loss in 2007, United Airlines parent UAL put its chief financial officer on a conference call to clarify the company's short-term strategy.

United has talked before about spinning off its maintenance operation and frequent-flier program, but has subsequently been mentioned as a potential merger partner for Delta. That makes the prospect of selling off those divisions a mixed bag.

"If you looked at the situation and said what would you want to happen, you'd want to do consolidation before you did (maintenance) or a frequent flier transaction -- that would increase the scale of the business and the value of the business," Chief Financial Officer Jake Brace told analysts on the call. "...it doesn't make any sense for us to wait for consolidation to happen or not happen; we don't control that one way or the other."

Brace said UAL is already evaluating proposals for its maintenance business, but does not expect to make a decision in the first quarter.

The frequent flier program might stick around longer. United is working out the accounting details needed to break out the program's profit and loss separately from the company as a whole. Brace said UAL expects to have that ability by the second quarter, but stopped short of promising those numbers would be made public.

As for the week's hottest rumor, the company is offering no further comment on a possible merger with Delta, or any other consolidation planning which might be underway.

TheStreet.com reports that despite posting a smaller than expected fourth-quarter loss of $53 million, and net income of $352 million for all of 2007, UAL stock got hammered Tuesday following the announcement. After falling more than $2 to close at $30.92 per share, the stock recovered much of its loss the following day, ending Wednesday at $36.41.

FMI: www.ual.com