UAL to post $US2.7b cost on writedown

United Airlines parent UAL will record second-quarter costs of as much as $US2.7 billion to reduce the value of all its assets and pay employee severance.

The cut in so-called goodwill will produce a non-cash charge of as much as $US2.3 billion, UAL said in a US regulatory filing. Payroll cuts will produce $US82 million in costs, and another $US246 million is tied to retiring Boeing Co. 737 jets.

Today’s move underscored the strain on the world’s second- largest airline from this year’s 61% surge in the price of jet fuel. The biggest US carriers are parking 430 aircraft and slashing about 20,000 jobs to stem 2008 losses that the Air Transport Association trade group says may reach $US13 billion.

SydneyMorningHerald