Four US airlines became the latest major carriers to report quarterly losses and to post hundreds of millions of dollars in charges from their fuel hedges.
The fourth-quarter results on Thursday from Continental Airlines, US Airways, JetBlue Airway and Alaska Air Group follow losses reported by other major airlines that also were battered by volatile fuel prices and a shaky economy.
Even a stunning 75 percent drop in the price of oil in the second half of last year managed to sting the airlines, many of which saw their fuel hedges become liabilities. Carriers remained on the defensive this year as some cut capacity to bolster fares as travel budgets shrank.
"The impact of high oil prices acted as a catalyst for airlines to take unprecedented measures to bring the supply of seats back into balance with passenger demand," US Airways chief executive Doug Parker said in a statement.
"We believe these actions have significantly softened the blow from the economic downturn that we as an industry now face," he said.
Last year, the airline industry slashed capacity and some carriers plan more cuts.
Continental, the number 4 US airline, said it expected to reduce its mainline capacity by 7.4 percent in the first quarter and by 3.5 percent to 4.5 percent for 2009.
"That's the only thing that's going to save us in the first half," said Calyon Securities airline analyst Ray Neidl. "We're looking for a lot of weakness in the first half of the year."
Neidl said that if airlines can retain their capacity discipline, they can be profitable in the second half of 2009.
CONTINENTAL RESULTS
Continental said its fourth-quarter net loss widened to USD$266 million, or $2.33 per share, from USD$32 million, or 33 cents per share, a year earlier.
The company said it took a USD$44 million charge for payouts to retiring pilots and a USD$125 million one-time loss on some fuel hedges. The airline had said last week that it would take the charge on some fuel derivative contracts with a bankrupt counter-party.
Continental said its revenue fell 1.5 percent in the fourth quarter to USD$3.5 billion.
US AIRWAYS RESULTS
US Airways said its fourth-quarter net loss widened to USD$541 million, or $4.74 per share, from USD$79 million, or 87 cents per share, a year earlier.
The carrier made headlines this month when one of its pilots was forced to land a plane on the Hudson River in New York.
Special charges included USD$234 million of losses resulting from mark-to-market adjustments on fuel hedging instruments.
US Airways' revenue fell 0.6 percent to USD$2.76 billion.
