United Airlines parent UAL posted a smaller-than-expected quarterly loss as it cut costs to cope with declining travel demand and said revenue trends continued to improve.

The carrier said Wednesday its fourth-quarter net loss narrowed to USD$240 from USD$1.32 billion a year earlier.

Excluding hedge gains and accounting charges, UAL said its quarterly loss was USD$176 million.

Operating revenue fell 8 percent to USD$4.19 billion.

The airline industry was hit in 2009 by falling demand for business travel as companies cut travel costs during the recession.

UAL said consolidated passenger revenue per available seat mile, a key airline measure, fell 5.2 percent in the fourth quarter, an improvement over the third quarter's 14.7 percent drop.

"While we certainly have a ways to go before we see a full recovery, the steps we have taken over the last year, combined with improving revenue trends, position us well to improve our margins and put us well on the road to closing the profitability gap," UAL Chief Financial Officer Kathryn Mikells said in a memo to staff.

The cash balance at quarter's end came to USD$3.4 billion, including unrestricted cash of more than USD$3 billion.