United Continental posts bigger loss, to cut jobs
(Reuters) - United Continental Holdings Inc (UAL.N) posted a bigger fourth-quarter loss on Thursday as costs rose and revenue fell, and the carrier said it expects to cut more than 600 management and administrative jobs.
The airline has been working to win back customers who turned to rivals after technology glitches hurt customer service. United made a number of changes to integrate as one carrier following its 2010 merger, including converting to a new computer reservation system.
Chairman and Chief Executive Jeff Smisek said 2012 was tough, but things were looking up. "Our operations are running smoothly … and our customer satisfaction scores are climbing," he said during a conference call.
Still, United said it was taking actions to improve financial results. The company said its officer headcount was reduced by 7 percent in December and starting next month, management and administrative staff would be cut by 6 percent.
Smisek said a portion of the cuts would come from voluntary exit programs.
United Continental has more than 85,000 employees.
The world's largest carrier said its quarterly net loss widened to $620 million, or $1.87 a share, from $138 million, or 42 cents a share, a year earlier.
It took charges of $430 million in the quarter, with much of that tied to paying off pension obligations and costs for systems integration and training and severance.
Excluding items, United said the 2012 quarterly loss was 58 cents a share, compared with a 61-cent loss expected by analysts on average, according to Thomson Reuters I/B/E/S.
Revenue fell 2.5 percent to $8.7 billion. Passenger revenue per available seat mile, a measure of pricing power and how full planes are, rose 0.6 percent in the quarter.
Operating costs rose 3.2 percent. Although fuel costs edged down 0.3 percent, expenses for salaries and maintenance materials were 4 percent and 9.2 percent higher, respectively.
Superstorm Sandy, which barreled through the U.S. Northeast in late October, reduced revenue by about $140 million and profit by about $85 million in the fourth quarter. The storm caused shutdowns at major New York area airports, including New Jersey's Newark Liberty International where United operates a major hub.
Shares of United were up 2.3 percent to $25.57 in afternoon trading.
(Reporting by Karen Jacobs; Editing by Jeffrey Benkoe, Maureen Bavdek and Nick Zieminski)