United Airlines, the bankrupt US carrier, attained the ignominious status of reporting the highest first-quarter losses of any airline, with a net loss of $1.3 billion (Eur 1.16 billion).
However, it significantly reduced its cash losses and, in recent weeks, has made progress on its restructuring during bankruptcy.
The bankruptcy court this week approved its almost $2.6 billion of annual wage cuts, after the airline secured agreement from all its major unions. United had threatened to impose new contracts if it did not win employee approval.
Some of the losses were due to the war in Iraq, higher fuel costs and SARS, which has slowed traffic on Asian routes.
However, United has also been hit by $248 million of reorganisation fees and has been forced to write down $137 million related to guarantee of debt for Air Canada, which filed for bankruptcy in April.
Although Delta Air Lines said last week it was restoring capacity that had been cut during the Iraq conflict, United warned that, for the rest of the year, capacity would be lower than previously announced.
United has also reduced capacity more aggressively than rivals.
For April, it would be down 14 per cent year on year, and for May down 20 per cent, it said.
"Domestic bookings have shown solid recovery, with May and June currently booked about three to four points ahead of last year," it added. "Atlantic bookings are also improving."
The carrier closed the quarter with $1.6 billion of cash and said daily cash burn had fallen to $4 million. It drew down $92 million of cash from its lenders during the quarter.
