The airline recently has taken large one-time quarterly accounting losses related to its fuel hedge program, which became less valuable as energy prices fell from peaks in July.
UAL said its mainline nonfuel unit costs, excluding some items, were expected to be up 1 percent to 1.5 percent in the first quarter, a smaller rise that previously forecast.
On a consolidated basis, which includes all UAL units, unit costs were seen up 1.5 percent to 2 percent for the quarter.
This compares with an earlier estimate for an increase of 4 percent to 5 percent for both mainline and consolidated operations.
The reduction in estimate reflects both the results of continued efforts to drive cost savings across the company and the impact of softening demand on revenue-driven and traffic-driven expenses, UAL said in a regulatory filing.
UAL expected consolidated passenger unit revenue to be down 11 percent to 12 percent in the first quarter, while consolidated capacity is expected to be down 11.7 percent.
(Reporting by Kyle Peterson; editing by Jeffrey Benkoe)