Network News

X My Profile
View More Activity
2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

United Airlines Parent Posts $1.3 Billion Loss

UAL, the parent company of United Airlines, said this morning that it lost $1.3 billion in the fourth quarter of 2008, partly from operating losses but also from bad bets on fuel hedges.

Airlines typically try to hedge against high fuel prices by buying futures at a set price, anticipating that the prices will actually rise higher. When oil was trading at $147 per barrel in July, buying futures for, say, $100 per barrel looked like a good idea.

But with oil trading now at $40 per barrel, the bets go terribly wrong: Airlines still have to pay the equivalent of $100 per barrel for oil, losing $60 for each barrel that is turned into jet fuel.

As a result, UAL recorded more than $900 million in hedging losses in the fourth quarter.

Even without the hedging losses, though, UAL would have posted a loss as the ongoing recession hammered the travel industry.

United said it would let go another 1,000 workers by the end of the year in addition to the 1,500 already announced.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  January 21, 2009; 10:14 AM ET
Categories:  The Ticker  | Tags: UAL, United Airlines, recession  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Markets Open Up; Geithner Faces Senators
Next: Geithner's Testimony: 'Serious Reform' Of Bailout Needed


Good. The current management of United has taken a first-class air carrier and turned it into a fleet of flying Greyhound buses. Their customer service is non-existent and they spit on the customers who once made them the largest airline in the country. I used to be a Premier Exec frequent flyer and now wouldn't get on a United flight at gunpoint.

One of these days the retail and service sectors of our economy are going to discover that a customer ignored is a customer lost forever. Consumers have looooong memories.

Posted by: hisroc | January 21, 2009 10:09 PM | Report abuse

The comments to this entry are closed.

RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company