UAL Corp, parent of United Airlines, posted a narrowed quarterly net loss on Tuesday, but its revenue was hit hard by economic recession that drained travel demand.

The company said its first-quarter loss amounted to $382 million, or $2.64 per share, compared with $549 million, or $4.55 per share, a year earlier.

Excluding one-time items, UAL said it lost $4 per share, which compares with a Wall Street consensus forecast for a $4.45 per share loss, according to Reuters Estimates. The items included mark-to-market hedge gains and accounting charges.

UAL shares were down 3.24 percent at $5.68 in early trade on Nasdaq.

The airline industry has been battered by an economic recession that has eroded demand, causing UAL and other airlines to slash their capacity. UAL said its mainline capacity is expected to be down 9 percent to 10 percent for all of 2009.

UAL said it saved $729 million, or 38.7 percent, in consolidated quarterly fuel costs due to declining fuel prices since July. The savings included the impact of settled hedge losses suffered as falling fuel prices eroded the value of hedges.

The company expects mainline costs per available seat mile, excluding fuel and other items, to rise 1 percent to 2 percent in 2009.

UAL said its consolidated unit revenue fell 11.1 percent year-over-year.

(Reporting by Kyle Peterson)