Print

Email story

Comment

Email editor

2004 may be airlines' 2nd-worst year ever

CHICAGO - United Airlines' parent company reported a $664-million loss for the fourth quarter Thursday and a $1.6-billion loss for 2004, which is shaping up as the industry's second-worst annual loss because of soaring jet fuel costs and fierce price competition.

UAL Corp.'s results mark the company's 18th straight quarterly loss. United, which has been in bankruptcy for 26 months, has lost $9.7-billion in the four years since it last turned a profit, in 2000.

United's annual loss was exceeded only by Delta's $5.2-billion deficit and makes it likely that 2004 will go down as the second-biggest money-losing year for U.S. commercial airlines. The worst was 2002, when losses topped $10-billion. With US Airways and Alaska Airlines still to report, 2004 losses total $8.6-billion.

Most airlines blame the spike in fuel prices for the bulk of this year's losses, which dwarf the $2.7-billion loss the industry posted last year. JetBlue Airways Corp., one of the few carriers to turn a profit last year, said Thursday that its fourth-quarter profit dropped sharply, partly because of higher fuel costs.

The Air Transport Association estimates that U.S. airlines spent 40 percent more on jet fuel in 2004, or $6-billion, based on data from the Department of Transportation.

"The big surprise for the year was the elevation of fuel prices, and our business plan didn't incorporate those elevated levels," United chief financial officer Jake Brace said Thursday.

Richard Bittenbender, an airline analyst at Moody's Investors Service, said he thinks the industry might have been able to eke out a small gain, despite the pressure on fares, had it not been for the huge spike in jet fuel prices.

"It's the double whammy of the reduced revenue stream and the fuel prices that has prolonged the process," Bittenbender said.

UAL's $1.6-billion loss for the year was its smallest of the past four years. The company last made money in 2000, when it had net income of $322-million.

AMERICAN TO SELL FOOD ON LONG FLIGHTS: Starting Tuesday, American Airlines will sell food on most of its flights of three hours or longer. On the menu are $3 snack boxes and $5 sandwiches on those flights. The airline originally said in December it would begin charging coach passengers for food, but until now hadn't disclosed specific routes that would have the service and what food would be provided. American said it will save $30-million this year through the food program.

SOUTHWEST ENDS SERVICE TO HOUSTON AIRPORT: Southwest Airlines Co. said Thursday it will stop service at Houston's Bush Intercontinental Airport April 2 because of ongoing losses there but will continue to operate at nearby and smaller Hobby Airport. The airline said it would contact passengers with reservations to help them make new arrangements.

JETBLUE MAY ALLOW USE OF BLACKBERRYS: JetBlue Airways Corp., the first U.S. airline to provide seat-back televisions and live satellite programming, is studying ways to allow the use of BlackBerry e-mail pagers during flights, chief executive David Neeleman said. The airline's LiveTV subsidiary is looking into ways to boost signals for the devices, Neeleman said. The devices, like cellular phones, can't be used during flights.

[Last modified January 28, 2005, 00:20:16]