Still In The Red

UAL Corporation, the holding company whose primary subsidiary is United Airlines, today filed its January Monthly Operating Report (MOR) with the United States Bankruptcy Court. The company reported a loss from operations of $191 million, which represents an improvement of approximately $140 million over January 2003. Mainline passenger unit revenue improved 8% year-over-year, well ahead of the industry average. Mainline unit costs for January, excluding special charges and fuel, improved 14% year-over-year. The company reported a net loss of $252 million, including $26 million in reorganization expenses. The majority of reorganization expenses were non- cash items resulting from the rejection of aircraft as the company aligns its fleet with the market. UAL met the requirements of its debtor-in-possession (DIP) financing for the twelfth straight month.

"United is continuing to move steadily ahead with its reorganization efforts," said Jake Brace, United's executive vice president and chief financial officer. "Our financial results show progress compared to January a year ago, and United continued to outpace our competitors in passenger unit revenue improvement, despite the seasonally weak demand across the industry, which we expect to continue in February as well."

UAL ended January with a cash balance of about $2.2 billion, which included $650 million in restricted cash (filing entities only), a decrease of $131 million, that reflects a quarterly retroactive wage payment to International Association of Machinists members of $63 million. As part of its DIP financing agreements, UAL's lenders required the company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) of $901 million between February 1, 2003 and January 31, 2004.

FMI: www.united.com