Airlines' losses are less than expected
WASHINGTON - United Airlines parent UAL Corp., US Airways Group Inc., and JetBlue Airways Corp. posted second-quarter losses yesterday as their latest plans to cope with record fuel prices pushed industrywide job cuts to 26,000.
Airline stocks soared as results beat analysts' estimates and oil fell to a six-week low. United, the world's second-largest airline, lifted planned job reductions to 7,000 by the end of 2009. US Airways said it would cut 18 percent more jobs than previously planned, and JetBlue said its cuts would be "commensurate" with plans for reduced flight capacity.
"This is the inevitable consequence of the high fuel costs," said Dave Swierenga, president of consulting firm AeroEcon in Round Rock, Texas.
Yesterday's results pushed combined losses at six of the eight largest US carriers to $5.8 billion for the quarter. Through the first half, only one of the big carriers, Southwest Airlines has managed a quarterly profit.
AMR Corp.'s American Airlines, Continental Airlines Inc., and Delta Air Lines Inc. last week cited a doubling of fuel prices in the past year as they too posted deficits. Analysts expect Northwest Airlines Corp. to divulge a loss yesterday.
UAL shares rose the most since the company exited bankruptcy two years ago, jumping $3.42, or 69 percent, to $8.41.
Its net loss was $2.73 billion, or $21.47 a share, versus year-earlier profit of $274 million, or $1.38 a share. Excluding a write-down for severance, the loss was $151 million, or $1.19 a share, less than the $2.05 estimate of analysts in a Bloomberg survey.
US Airways recorded a $567 million loss, or $6.16 a share, and said it will cut 2,000 jobs, up from a previous target of 1,700. Excluding certain items, the loss was $1.11 a share, less than the $1.30 analysts expected. The stock added $1.58, or 59 percent, to $4.27.
JetBlue lost $7 million after earning $21 million a year ago. The 3-cents-a-share loss was narrower than the 7-cent average estimate in a Bloomberg survey, and the stock rose 61 cents, or 16 percent, to $4.50.
