UAL to record $2 bil accounting charge

NEW YORK -- United Airlines parent UAL Corp. said it will record $2.6 billion to $2.7 billion in accounting charges in the second quarter, according to a regulatory filing Friday.

The largest chunk is a noncash impairment charge of between $2.2 billion and $2.3 billion. UAL said in the filing it is writing off the "entire value of goodwill on its books," but company officials weren't available to elaborate.

UAL also expects to record noncash charges of $246 million related to 737s that are being cut from the company's fleet.

The Chicago-based company said it will take $82 million in charges related to job cuts, and $60 million in charges related to certain unspecified projects that have been stopped of delayed.

UAL said it expects to take additional accounting charges in future quarters related to capacity reductions and an increase in certain employee benefits, but said it does not yet know the amount or timing of the charges.

United Airlines, the nation's second-largest carrier, has announced plans to cut about 2,550 jobs, including 950 pilots and 1,600 salaried positions. The company also plans to slash capacity and reduce its fleet size in the face of soaring fuel prices.

UAL shares fell 44 cents, or 11 percent, to $3.73 in afternoon trading and earlier traded at a low of $3.47, its lowest point since emerging from bankruptcy in 2006. Meanwhile, the broader markets plunged as oil prices hit a new record above $147 per barrel and fears stirred that a government bailout might be needed to save beleaguered mortgage lenders Fannie Mae and Freddie Mac.