United Airlines and American Airlines reported losses for the fourth quarter of 2008, citing high fuel costs. For the fourth quarter, United’s loss was 340 million dollars, for a combined total of 2.07 billion dollars for the year of 2008. American reported revenues in the fourth quarter fell 3.1 percent to 5.5 billion dollars as passenger and cargo traffic fell. However, for the entire year of 2008, revenue was up 3.8 percent. However, that’s not all; United said it was cutting an additional 1,000 jobs by the end of 2009 to cope with the recession.
This announcement from these major carriers is no surprise. Many of the predictions fell right in line with what analysts had predicted. Although 2008 was rough for airlines, especially these two, 2009 looks promising. “Our management team made timely decisions that resulted in fundamental improvements across our business, which will hold us in good stead in 2009,” said United Airlines Chairman, President, and CEO Glenn Tilton. “Our fourth quarter and full-year 2008 results reflect the difficulties all airlines faced last year, but we believe our steps to reduce capacity, bolster liquidity, and improve revenue helped us better manage the challenges of record fuel prices and a weak economy,” said Gerard Arpey, Chairman and CEO of AMR Corp. As I’ve said before, 2009 looks very promising for airlines. Although Q4 of 2008 seemed very unprofitable, Southwest Airlines is expected to unveil a profitable quarter today. I expect to write something about their results tomorrow.
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