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Friday, 31 January, 2003, 15:58 GMT
United Airlines flies in massive loss
United Airlines aeroplanes
United is trying to emerge from bankruptcy
The parent company of United Airlines, UAL Corporation, has reported a record loss of $3.2bn (1.9bn) for 2002.

The huge deficit follows a dismal year for the world's second largest airline, which ended with it filing for bankruptcy in December.

The company keeps flying, though, and is now negotiating deals with its unions about cost cuts, and with creditors about a debt restructuring.

United was hit by the downturn in air travel following the 11 September terror attacks and the general economic slowdown.

Last week, AMR Corporation, the parent of American Airlines, reported a loss of $3.5bn for 2002 - the largest annual loss in aviation history.

Financial struggle

UAL's chairman and chief executive Glenn Tilton said United "did everything within its control, slashing costs in every aspect of the business" in an attempt to avoid bankruptcy.

But wage cuts agreed with unions proved insufficient to get the Air Transport Stabilisation Board (ATSB) - the body set up to help US airlines in the wake of the 11 September attacks - to approve a loan of $1.8bn.

United filed for bankruptcy shortly after the ATSB's decision.

It was the second US airline to file for bankruptcy in 2002 following US Airways who filed for protection in August.

'Critical' changes needed

Mr Tilton said the airline now had the opportunity to make "significant additional changes by working with our unions and others".

But he warned that "difficult but critical" changes needed to be made.

United is now working on a new business plan to allow it to move out of bankruptcy and Mr Tilton said the airline would "continue to compete aggressively" during 2003.

Airlines around the world are cutting staff after the terror attack

Bankruptcy for United

Other US airlines

Europe's troubles
See also:

09 Dec 02 | Business
09 Dec 02 | Business
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