United marching out of bankruptcy

0 Comments | Deseret News (Salt Lake City), Nov 21, 2005 | by Dow Jones/Associated Press

CHICAGO -- United Airlines is "marching forward" toward exiting bankruptcy early next year, Jake Brace, chief financial officer, said following a court hearing here Friday.

At the hearing, U.S. Bankruptcy Court Judge Eugene Wedoff requested more information from disputing parties over restructuring 14 aircraft leases. Almost all other aircraft leases have been restructured in Chapter 11 to lower the airline's costs.

Brace said United's domestic business continues to improve this month, as fuel prices decline and competitors take out U.S. capacity.

United, which last month applied for five new routes from Chicago and Los Angeles to Mexico, sees international expansion opportunities "at the margin," Brace said. The carrier did most of its international expansion in 2004.

Currently, half of the airline's revenue comes from international travel, Brace said, although that includes connecting flights within the United States.

United, a unit of UAL Corp., filed for bankruptcy protection nearly three years ago, in December 2002. Judge Wedoff has approved the airline's plan to exit bankruptcy, with final hearings scheduled for Jan. 17 and 18, 2006.

After receiving more than $3 billion of new financing to complete its financial reorganization, the company expects to issue new stock and to return to steady profitability.

Since 2000, the second-largest U.S. airline has lost more than $10 billion.