In addition,
UA is treating UAX differently now. Per the report:
(3) During the second half of 2003, United changed its classification of
United Express ("UAX") revenues and expenses for United Express
carriers Air Wisconsin Airlines Corporation, Mesa Air Group, SkyWest
Airlines and Trans States Airlines in conjunction with new or
substantially revised agreements with those carriers. Previously,
revenues and expenses were netted and recorded in passenger revenue.
In accordance with Emerging Issues Task Force No. 01-08, "Determining
Whether an Arrangement Contains a Lease", the Company concluded that
the revised agreements are leases and required to be recorded gross
on the income statement. Therefore, amounts for these United Express
carriers are recorded as "regional affiliates revenue" and "regional
affiliates expense." Prior period amounts have not been
reclassified.
United was not able to reach a comparable market-based arrangement
with United Express carrier Atlantic Coast Airlines ("
ACA"). As a
result, the revenues and expenses related to
ACA continue to be
included net in passenger revenues. On April 2, 2004, United and
ACA
agreed to end the UAX relationship and entered into a formal
transition agreement providing for an orderly transition of UAX
flying and ground handling. United is planning to replace the
ACA
flying with a combination of six regional airlines (and some United
mainline service) including some new UAX carriers that we expect to
account for as leases in conjunction with EITF-01-08.
-------------------------
If you look at UAX revenues versus costs, you'll see UAX lost quite a bit of money!
Operating revenues:
Regional Affiliates* 293
Operating costs:
Regional affiliates* 374