United Airlines loses dollars 95m

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The Independent Online
UNITED AIRLINES, America's second-biggest carrier, yesterday joined the ranks of airlines hit by the US air fares war as it collapsed to a net loss of dollars 95.1m ( pounds 49.5m) in the second quarter, writes Michael Harrison.

The result compares with a profit of dollars 52.7m in the same period last year and brings United's losses for the first half of the year to dollars 187.4m.

The announcement was accompanied by a warning from Stephen Wolf, chairman, that the airline would have to consider cost reductions, presumably including redundancies, if the position was not reversed. He blamed the plunge into losses on severe price competition and recession in many of its world markets, and said United expected these factors to have a 'negative effect' on its results for the rest of the year.

Other US airlines, including Delta and USAir, the carrier in which British Airways is planning to buy a dollars 750m stake, have also reported increases in second-quarter losses.

The downturn is blamed on the number of US airlines going into Chapter 11 bankruptcy protection and then slashing their fares, forcing healthier airlines to follow.

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