"UAL wants a reorganization extension...again"

Tuesday, August 10, 2004

UAL wants a reorganization extension...again
Pacific Business News


Bankruptcy Judge Eugene Wedoff, who is supervising the United Airlines
receivership, is considering a request by UAL Corp. to be given until
the rest of the year to develop a workable plan to emerge from Chapter
11. 
  
Bankrupt companies are typically given a deadline to develop such a
plan, after which outsiders are allowed to submit reorganization plans
of their own. It is not unusual to grant one more extensions of the
company's exclusivity period, but Judge Wedoff has already granted
several. The most recent extension granted was for only one month,
through Aug. 30. 

United entered bankruptcy near the end of 2002 after its mechanics
rejected contract concessions and the federal Air Transportation
Stabilization Board voted not to grant federal loan guarantees to the
number two U.S. carrier. Judge Wedoff later imposed concessions on the
mechanics and all other UAL employees. UAL cut its costs but failed
twice more to win federal loan guarantees and its executives are now
trying to figure out how to survive without them. 

For the second quarter, United had revenue above $4 billion and costs
below $3 billion, yielding a $7 million operating profit and a net loss
of $247 million. Revenues have been rising and costs falling. 

United flies more seats to Hawaii from the U.S. mainland than any other
airline. Its flights to Hawaii start from UAL hubs in Denver, San
Francisco and Los Angeles, but in recent months it has also resumed
nonstops from its headquarters hub at Chicago O'Hare.


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