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Last Updated: Wednesday, 7 September 2005, 16:22 GMT 17:22 UK
US airline 'back from the brink'
United Airlines jet
United filed for protection from creditors in December 2002
US carrier United Airlines looks set to emerge from bankruptcy protection status after filing its reorganisation plan to the federal court.

The struggling airline hopes the move will enable it to exit Chapter 11 bankruptcy where it has been financially grounded for two years.

Proposals for up to $3bn (1.63bn) in exit financing have been received, the Illinois-based carrier said.

Soaring fuel costs and competition for low-cost carriers have hampered United.

Since filing for bankruptcy protection in December 2002, United has cut costs by $7bn, offloaded pension plans, renegotiated pay deals and slashed its workforce by 20,000 to 60,000.

United is the second-largest US carrier after American.

Salaries slashed

Back in January of this year, pilots and flight attendants at United agreed to accept pay cuts worth $310m a year to help the carrier bounce back from Chapter 11 bankruptcy protection.

With these filings before the court, the countdown has begun,
Glenn Tilton, chief executive

In May, the airline reported a doubling in first-quarter losses to $1.1bn, compared with a $459m loss in the previous year.

But in the same month a US court granted United permission to end its pension funds, saving United $645m a year in what was to become America's largest corporate pension default.

United said at the time that ended its pensions scheme was crucial for its survival, but unions described the move as a "devastating blow".

Responsibility for its four defined-benefit plans were transferred to the US government's pension agency, but this could lose employees thousands of dollars a year from their pensions pots.

"With these filings before the court, the countdown has begun," United chief executive Glenn Tilton told employees on Wednesday.

"We expect to formally exit bankruptcy in early 2006, with a target exit date of February 1st."

While United is hoping for a revival, other US airlines - notably Delta - may be forced to seek bankruptcy protection as a result of the higher jet fuel prices caused by the hurricane.


SEE ALSO:
United's quarterly losses double
12 May 05 |  Business
United to terminate pension plans
11 May 05 |  Business
Unions agree United wage cut deal
31 Jan 05 |  Business
United pilots' pensions protected
30 Dec 04 |  Business
United Airlines imposes wage cuts
14 Dec 04 |  Business
'Fiscal timebomb' for US airlines
15 Oct 04 |  Business


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