Steep loss leads to 'fundamental' overhaul at United including job cuts
Wednesday April 23, 2008 United Airlines parent UAL Corp. suffered a massive $537 million loss in the first quarter, widened precipitously from a $152 million deficit in the year-ago period, and said Tuesday that it will "fundamentally overhaul every facet of our business," starting with the grounding of 30 aircraft and the laying off of 1,100 employees.
"Consolidation is only one of many changes needed together with capacity discipline, new revenue streams and elimination of assets that do not earn a sufficient return, particularly in this environment," Chairman, President and CEO Glenn Tilton said. "The pressure of high energy prices and a weakening economy are a wakeup call that the pace of change must accelerate."
Operating revenue climbed 7.7% to $4.71 billion but was offset by a 15.4% increase in costs to $5.15 billion. Fuel expenses were up 51.3% to $1.58 billion. UAL's operating loss widened to $441 million from $92 million in the year-ago period.
The company has hedged 25% of its forecasted fuel consumption for the remainder of 2008. It announced plans yesterday to reduce full-year nonfuel costs by an additional $200 million over and above the $200 million in cuts announced in March, and capital expenditures by $200 million. Another 9% fourth-quarter mainline capacity reduction will be added to a previously announced 5% cut, with consolidated ASMs falling 4% year-over-year. Full-year mainline capacity now is expected to drop 1.5%-2.5%, with consolidated capacity falling 1%-2%.
The fleet reduction, to consist of narrowbody aircraft, represents an increase of 10-15 units over plans announced last month (ATWOnline, March 19), while the job cuts, which will be accomplished through furloughs, attrition and buyouts, will comprise 500 salaried and management employees and 600 union-represented positions and will occur by year end.
"With a strong cash balance and more than $3 billion in unencumbered assets, we are well positioned to manage the challenges ahead," Executive VP and CFO Jake Brace said.
Consolidated RPMs fell 3.2% year-over-year to 29.74 billion against a 0.1% dip in ASKs to 38.41 billion, dropping load factor 2.4 points to 77.4%. Adjusted yield rose 11.6% to 14.29 cents as operating unit revenue lifted 7.9% to 12.27 cents. However, unit cost soared 15.5% to 13.41 cents and 2.4% to 8.59 cents excluding fuel costs, special items and expenses related to its UAFC fuel subsidiary.
by Brian Straus
Thursday April 24, 2008 Alitalia scheduled a board meeting for late today following the decision by the outgoing government to grant the ailing carrier a €300 million ($477.9 million) emergency bridge loan to continue operations (ATWOnline, April 23).
AZ's management is scheduled to meet with its unions this morning. The European Commission yesterday confirmed it had not received official notification of the loan and said it could not take a decision on whether it was permissible under state aid and competition rules.
Meanwhile, Prime Minister-elect Silvio Berlusconi vowed that Alitalia will be rescued by an Italian consortium by late May, though he warned that severe job cuts would be inevitable. "This [loan] has given Alitalia the means to survive a few months, time which will be used by a group of Italian entrepreneurs, aided by banks, professionals and airlines, to study Alitalia's accounts," Berlusconi said during a radio interview widely cited by Italian media. "After due diligence of three, four or five weeks, this new group will present a binding offer and take over the running of Alitalia, which will involve a painful reduction in personnel," he added without naming any potential investor.
Suben Click y Avolar cargos
El cargo por combustible en Mexicana asciende a 632.50 pesos, mientras que en Avolar el costo del mismo concepto se elevó a 250 pesos
Por Lilián Cruz
Ciudad de México (25 abril 2008).- Click y Avolar decidieron incrementar el valor de los cargos que aplicaron al inicio del año como medida para resistir los altos costos de la turbosina.
La aerolínea de bajo costo de Mexicana cobraba hasta marzo de este año una tarifa por combustible de 517 pesos, sin embargo, ésta se incremento en 22 por ciento ya que en todos sus vuelos este mismo cargo ahora asciende a los 632.50 pesos.
La cuota adicional por equipaje facturado se mantuvo en los 9.20 pesos.
Por su parte Avolar, también incrementó los cargos que cobra a los pasajeros por combustible y lo hizo en un 13 por ciento al pasar de 220 pesos a 250.
Esta empresa también cobra 140 pesos por distribución, dinero con el que se queda la aerolínea.
Sin embargo, este cargo es adicional a la Tarifa de Uso de Aeropuerto, mejor conocido como TUA e IVA, los cuales se van al Aeropuerto y a la Secretaría de Hacienda respectivamente.
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