Transportation Industry

Company Watch - United Airlines

AirGuide Business, Oct 13, 2008

Oct 13, 2008

Alaska Airlines on Tuesday joined United Airlines in warning that fuel hedges could lead to quarterly losses. "As a result of the significant decline in crude oil prices since the end of the second quarter, we expect to record approximately $220 million in mark-to-market loss on the value of our fuel hedge portfolio," the company said in an SEC filing. Industry watchers say other airlines could report similar losses from hedging activities, though Southwest Airlines already has said it expects any impact to be minimal. Oct 7, 2008

United Airlines CEO Glenn Tilton believes the unraveling global financial crisis makes the steps it and other US carriers have taken in cutting capacity even more timely. The Star Alliance carrier this summer announced plans to cut around 100 of its mainline aircraft - representing around a quarter of its fleet - as part of a major scaling back from this winter. Other US mainline carriers are similarly cutting capacity Speaking during a Star Alliance press event in Sao Paulo, marking Brazilian carrier TAM's move to join the alliance. Oct 9, 2008

United Airlines' decision to cut capacity by 16% in response to spiraling oil prices may help the carrier, and others who have taken similar measures, ride out the current crisis in financial markets. While it is not yet clear whether United will need to make further layoffs, President and CEO Glenn Tilton said the airline and other domestic carriers are currently stable. Oct 9, 2008

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