"CEO says United will get on its feet"

Friday, June 11, 2004

CEO says United will get on its feet
The Lincoln (NE) Journal 


CHICAGO - United Airlines expects to emerge from bankruptcy by year's
end even if its pending application for a $1.6 billion federal loan
guarantee is rejected, CEO Glenn Tilton said Friday.  

Cash-crunched United believes it qualifies for and urgently needs the
government backing, which the Air Transportation Stabilization Board is
expected to rule on soon. But Tilton said the carrier's 18-month
restructuring has left it on solid enough footing to finish the
reorganization regardless of the verdict.

United is targeting fall for its exit from Chapter 11, but, he says,
that timing could be in jeopardy if the company doesn't receive the loan
guarantee.

Tilton declined to discuss any contingency plans if the government
backing falls through, but he said the airline's bankruptcy lenders have
strongly endorsed its restructuring steps, and the overhaul has left it
resilient despite continuing losses. 

The airline recorded a modest operating profit in May and would be en
route to an operating gain for the entire second quarter if not for
recent jet fuel increases that have added $750 million to its estimated
fuel tab for 2004, Tilton said.

Some analysts doubt the government will approve the loan guarantee. But
few think a denial would drive the airline out of business.

UBS Securities analyst Sam Buttrick said in a note to investors Thursday
that a loan guarantee rejection would simply move United to Plan B,
"which would likely entail some combination of a longer stay in the
protective custody of bankruptcy and redoubled cost-reduction efforts." 


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