UAL Corp's bankrupt carrier United Airlines said on Saturday it expects higher oil prices to delay its return to profitability at an operating level until next year.
"It really depends on oil prices. If the oil price returns to levels we imagined when we put the (restructuring) plan together then we will be profitable next year on an operating basis," said Glenn Tilton, chairman and chief executive of United Airlines and parent UAL Corp.
United, the number two US carrier, had originally expected to make a modest operating profit this year, Tilton said on the sidelines of a conference of the airline group Star Alliance.
United has been pummelled by soaring fuel costs which it has said will total $750 million more in 2004 than it had estimated at the start of the year.
Jet fuel, the airline industry's biggest operating expense other than labour, makes up 12-14 percent of the carrier's operating costs.
Tilton said United Airlines was minimally hedged against a rise in oil prices.
"The reason we are unhedged is because the collateral we have to post to counterparties actually moots the economic benefits of a hedge," he said.
UAL Corp posted a first-quarter net loss of $459 million, due to the conflict in Iraq, the weak economy, restructuring costs and rejection of aircraft leases.
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