United Continental to cut 600 jobs; reports loss
STAFF AND WIRE REPORTS January 24, 2013 7:52AM
United Airlines jets sit on the tarmac at Cleveland Hopkins Airport in Cleveland. AP file photo
Updated: February 26, 2013 6:26AM
United Airlines’ parent United Continental Holdings said it will cut roughly 600 jobs or 6 percent of its workforce as it reported a $620 million fourth-quarter and $723 million full-year loss as travelers stayed away following its problems earlier in the year with absorbing Continental.
The system-wide cuts will include management and administrative positions and will be realized through involuntary cuts, voluntary separations and by not filling open positions, spokeswoman Megan McCarthy said. She could not specify how many of the cuts will be in the Chicago area. She said involuntary cuts will start next month.
The cuts come on top of a 7 percent cut in its officer ranks announced in December.
UAL also said it still expects to take delivery of two new Boeing 787 Dreamliner airplanes in the second half of the year.
United had been the only U.S. airline that was flying the plane, which was grounded by federal regulators last week until battery-related problems with the plane are resolved.
UAL said it continues to have confidence in the 787.
UAL’S full-year lost almost wiped out its $840 million profit from 2011.
The fourth-quarter loss worked out to $1.87 per share. Excluding special items the loss would have been 58 cents per share, matching expectations of analysts surveyed by FactSet.
Superstorm Sandy cut $85 million from its results in 2012’s final quarter.
A year ago the company lost $138 million, or 42 cents per share.
United’s switch to a single passenger-information system last year caused problems with its website and frustrated some of its most lucrative customers when they couldn’t get upgrades to first-class seats. Some of its customer service workers at airports struggled with new software on their computers, creating long lines.
Those problems drove potential customers away. Traffic fell 3.2 percent in the fourth quarter. United reduced the amount of flying it did, too, so its planes were actually slightly fuller.
The company is aiming to put those issues behind it. It has said the technology issues are solved.
“With much of our integration behind us, our significantly improved operational performance and our increasing customer satisfaction, we can now go forward as one company,” said Jeff Smisek, chairman, president, and CEO of United Continental Holdings Inc.
Revenue for the full year ticked up slightly to $37.15 billion.
“We see improvement this year and expect UAL to narrow the gap between itself and peers on revenue performance,” S&P Capital IQ analyst Jim Corridore wrote in a note.
But he added that the company’s “ongoing integration challenges keep us cautious on the shares, despite our positive view on the overall U.S. airline industry.”
Shares of the Chicago-based United Continental Holdings Inc. rose 54 cents, or 2.2 percent, to close at $25.54.