United Airlines parent UAL Corporation said yesterday an uncertain industry outlook means it no longer plans to exit early from bankruptcy and it now aims to emerge in the first half of 2004.
Executives had recently indicated that the world's second-largest airline might exit from Chapter 11 much earlier than the 18 months originally projected last December, when UAL filed the largest bankruptcy in aviation history.
UAL bankruptcy attorney Mr James Sprayregen said at a court hearing that the company intends to submit an updated business plan to the Air Transportation Stabilization Board (ATSB) but he did not give a timeframe.
"It still remains to be seen whether the revenue recovery will be short- or long-lived," Mr Sprayregen said.
Unit revenue for the industry increased 8.1 per cent in July, boosted by a pick-up in summer travel.
But many industry observers worry about how airlines will fare once demand tapers off after the US Labor Day holiday on Monday.
United is working closely with the ATSB to replace those aspects of the company's original loan guarantee bid that were rejected as inadequate in December.
It has been firming its application around a plan that would rely on substantial cost savings and strategies to boost revenue and capture business travel. But public details remain sparse.
The company's retooled application would include $2.5 billion (€2.28 billion) in labour concessions and related work-rule savings over the next six years, more than $700 million in savings from renegotiated aircraft leases and other mortgages that are close to being finalised, and a new revenue outlook.
United chief executive Mr Glenn Tilton has given conflicting signals on the timing of a bankruptcy exit but recently expressed a strong desire for emerging early next year to take advantage of spring travel.
US Airways timed its March 31st bankruptcy exit the same way this year and received a $900 million federal credit guarantee to back a $1 billion loan that was an essential component of its restructuring plan. - (Reuters)
