UAL shocks Wall Street with performance

The parent company of United Airlines. UAL, announced losses half at what Wall Street has predicted, and shares shot up by nine per cent as a result. Lower costs considerably eased the revenue pressures that were being felt across the aviation industry and UAL has welcomed a slight increase in demand for air travel, which has been down for many months during the economic crisis that has gripped the world. The chief executive of UAL is happy at the new figures and believes that the travel sector is starting its long road to recovery after the recession that has badly damaged the industry.

This time last year UAL suffered a loss of $792 million but this year its figures show a loss of only $57 million. Fuel hedges were a major factor in the recorded loss and the whole operating revenue went down by 20 per cent to $4.43 billion. Many experts have noted the success of UAL in cutting down on its outgoing costs and Morningstar equity analyst Basili Alukos spoke of the tremendous job that the company was doing.

The figures released by UAL show that they ended this quarter with total amount of cash adding up to $2.8 billion: restricted cash of $309 million and unrestricted cash of $2.5 billion. The company has also said that it expects to be in ‘full compliance’ with its credit facility covenants. The revenue that the company received on its cargo went down by 43 per cent and it says it is aware that this area needs to see improvement.