UAL traffic off 3.3pc with Atlantic trade its one bright spot

UNITED Airlines has reported a 3.3 per cent traffic decline despite capacity reductions of 6.2 per cent for August with its load factor for the month dropping 2.5 per cent.

The airlines' August year-on-year decline in freight of 26.6 per cent to 851, 819 cargo ton miles and a 27.7 per cent fall in mail volumes to 130,596 ton miles.

The North American passenger trade, which represents more than half the volume was down 8.9 per cent to 5.57 million revenue seat miles, with the Pacific trade falling 4.9 per cent to 2.02 million RPM and Latin American suffering the biggest drop of 14.8 per cent to 268,444 RPM.

The one bright note in the passenger revenue miles was from the Atlantic trade, which gained 5.3 per cent to 1.83 million RPM.

"This is a resilient industry, and we are a resilient company," said UAL Corporation CEO Glenn Tilton. "While there is much outside our control, we are running a good airline with industry-leading cost control and best-in-class operational performance."

The company statement recorded US$252 million in cash losses on fuel hedges that settled in the second quarter. In addition, the company also recorded non-cash, net mark-to-market gains on its fuel hedges of $440 million.

Cash losses on the contracts that settled during the quarter were offset by $385 million in cash collateral that was returned in the same period.

UAL ended the quarter with a total cash balance of $2.8 billion, an unrestricted cash balance of $2.6 billion and restricted cash of $281 million and had $185 million in cash deposits held by its fuel hedge counterparties.

"We are taking aggressive action to position United for recovery, including reducing our international capacity by an additional seven per cent later this year, implementing industry-leading unit cost reductions, and bolstering our liquidity," said chief financial officer Kathryn Mikells. "We have more than $1 billion in unencumbered assets, and a proven track record of leveraging those assets to raise capital."

United Airlines operates 3,300 flights a day on United and United Express to more than 200 US and international destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago and Washington. With key global air rights in the Asia-Pacific region, Europe and Latin America, United is one of the largest international carriers based in the United States.

(Source: www.schednet.com)