United files plan to exit bankruptcy early next year
The parent of United Airlines, UAL Corporation, has filed its long-awaited reorganisation plan to take the airline out of bankruptcy.
United has been bankrupt since December of 2002 but hopes to emerge from Chapter 11 next February.
The carrier says it has proposals for $3 billion in exit funding, exceeding the $2.5 billion it had requested.
The company says the $3 billion will enable it to compete with other carriers.
The airline’s effort to stay solvent includes cost cutting to the tune of $7 billion. The airline renegotiated labour contracts, got rid of under-funded pension plans and slashed its workforce from 80,000 to 60,000.
United Chief executive Glenn Tilton told employees: “The fact that we have proposals for up to $3 billion in exit financing from four of the most prestigious financial institutions in the world is solid confirmation of the work that we have done together, and most importantly, of our ability to build on that success in the future.”
Some analysts however continued to question United’s cost projections, claiming that while it was making progress, it was still not built on a solid financial basis.
Report by David Wilkening
David
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