United's bankruptcy deadline extended

0 Comments | Deseret News (Salt Lake City), Sep 20, 2003

CHICAGO (AP) -- A federal judge on Friday granted United Airlines another five months to submit a plan to get out of bankruptcy. The new deadline is March 6.

The extension was the second granted by U.S. Bankruptcy Judge Eugene Wedoff for United, which is slowly regaining financial health but still faces numerous challenges before it can emerge from Chapter 11 as targeted by mid-2004.

Chief financial officer Jake Brace said the nation's No. 2 carrier needs to sort out several issues before it files a restructuring plan, including ensuring it can make billions of dollars in required pension payments over the next five years.

Since the war in Iraq ended and the SARS crisis abated, United and other carriers have seen passenger levels rise, providing a much- needed revenue boost. United filled a higher percentage of its seats in July and August than in any other month in its history.

"The revenue environment certainly improved over the summer," and solid fall bookings reflect the pace continuing, Brace said.

United plans to reapply for a $1.8 billion federal loan guarantee as part of its financial overhaul. The government rejected its first bid last December, citing a flawed business plan. Five days later, the Elk Grove Village-based carrier filed the largest bankruptcy filing in aviation history.