US airlines report record losses for third quarter

Two of the biggest airlines in the US reported staggering losses yesterday, mainly due to a steep fall in airline travel following the September 11th attacks.

United Airlines, the second-largest US carrier, said it lost $1.16 billion (€1.28 billion) in the third quarter, the worst three-month operating period in its 75-year history. It forecast that, with passenger use down 30 per cent in October, the fourth-quarter results would be even worse.

Delta, the third-biggest airline, reported a $295 million third-quarter loss. The world's number one carrier, American Airlines, last week reported record losses of $414 million for the July to September period.

UAL Corporation, parent of United Airlines, reported that, during October, its daily cash losses were $15 million, causing a 16 per cent slump in revenues to $4.1 billion from $4.9 billion.

This contributed to a July to September loss of $542 million - to which were added special charges of $865 million for aircraft impairment, layoffs and severance packages, and other items. The charges were partly offset by an initial $391 million cash grant from the federal government as part of a $15 billion industry bailout. United Airlines, which lost two planes in the attacks, was struggling to survive before September 11th. It lost $64 million in the same quarter a year ago due to flight cancellations over delays, and higher jet fuel costs and wages in the 55 per cent employee-owned airline.

"United, along with the rest of the airline industry, has been struggling with a weak economy and was dealt a difficult and painful blow by the September 11th terrorist attacks and their impact on air travel," Mr John Creighton, UAL's newly appointed chairman and chief executive said.

Delta Air Lines, which has cut several routes, including the winter service to Dublin and Shannon, blamed its $295 million third-quarter loss on the economic downturn and the travel slowdown after September 11th. The loss excludes a $104 million gain from the government bailout package. Revenues fell to $3.4 billion from $4.35 billion. Delta said the September attacks eroded quarterly revenues by about $400 million.

In September, Delta said it would cut 13,000 jobs, or 16 per cent of its workforce. Some 11,000 workers have decided to leave through voluntary leave or early retirement programmes and the remaining 2,000 will be laid off, the airline said.

Total net losses by US airlines could reach $5 billion this year, despite drastic cuts in schedules and staff, according to analysts.

Thousands of British Airways (BA) pilots, cabin crew and other staff have agreed to forgo their pre-Christmas bonus in a "spirit of compromise" to help safeguard the airline's future. This will save BA £15 million sterling (€24.2 million), while a further £11 million is being cut from the pay of thousands of middle and senior managers.