NEW YORK (CNN/Money) - United Airlines, the world's No. 2 airline, filed for bankruptcy protection Monday, succumbing to continued losses and staggering debt payments it could no longer afford to make, according to wire reports.

The decision to file for bankruptcy in the U.S. Bankruptcy Court in the Northern District of Illinois follows a weekend of meetings of the company's board of directors, and a warning from union leadership that the bankruptcy was "unavoidable and imminent."



The filing became a virtual foregone conclusion following rejection on Wednesday of United's request for $1.8 billion in federal loan guarantees. A three-member federal panel said that the airline's recovery plan depended on an unrealistic rebound in revenue, and that negotiated labor cost savings by the airline still left it with among the highest costs in the industry.



With United's parent, UAL Corp. facing the expiration of a grace period Monday on a missed $300 million loan payment, the airline executives said they had no choice but to seek protection from creditors.



The airline stressed it would continue to operate a normal schedule of flights and honor passengers' tickets and frequent-flyer mileage. The airline accounts for about 19 percent of U.S. air travel, with about 1,800 daily flights. According to sources close to the situation, it had arranged for about $1.5 billion in loans, known as "debtor-in-possession" financing needed to fund operations during a court supervised reorganization.



UAL had negotiated with union leaders for labor cost savings of $5.2 billion over the next 5-1/2 years in an attempt to win the $1.8 billion in federal loan guarantees. Those concessions disappeared with the rejection of the loan guarantee request by the Air Transportation Stabilization Board late Wednesday, leaving many of the employees receiving industry-leading wages.



Bankruptcy courts have the power to void labor and other contracts, though that can be a difficult and time-consuming process. UAL CEO Glenn Tilton told employees in a recorded message Friday that deeper cuts than those already negotiated and changes in work rules would be needed if the company was forced to reorganize in bankruptcy court. He didn't specify if management expected to win the deeper cuts in new negotiations or through court action.



Winning further negotiated concessions from the employees will be difficult. The airline's 13,000 mechanics voted against the concession package last week, despite strong support from their union's leadership. The Air Line Pilots Association said Friday it was surprised by Tilton's comments.



"We believe it is very premature to discuss these issues. ALPA is not interested in conducting our negotiations in the public forum," said the union's statement.

Jennyc

Unfortunately, we all knew it was coming

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Replying to:

NEW YORK (CNN/Money) - United Airlines, the world's No. 2 airline, filed for bankruptcy protection Monday, succumbing to continued losses and staggering debt payments it could no longer afford to make, according to wire reports.

The decision to file for bankruptcy in the U.S. Bankruptcy Court in the Northern District of Illinois follows a weekend of meetings of the company's board of directors, and a warning from union leadership that the bankruptcy was "unavoidable and imminent."



The filing became a virtual foregone conclusion following rejection on Wednesday of United's request for $1.8 billion in federal loan guarantees. A three-member federal panel said that the airline's recovery plan depended on an unrealistic rebound in revenue, and that negotiated labor cost savings by the airline still left it with among the highest costs in the industry.



With United's parent, UAL Corp. facing the expiration of a grace period Monday on a missed $300 million loan payment, the airline executives said they had no choice but to seek protection from creditors.



The airline stressed it would continue to operate a normal schedule of flights and honor passengers' tickets and frequent-flyer mileage. The airline accounts for about 19 percent of U.S. air travel, with about 1,800 daily flights. According to sources close to the situation, it had arranged for about $1.5 billion in loans, known as "debtor-in-possession" financing needed to fund operations during a court supervised reorganization.



UAL had negotiated with union leaders for labor cost savings of $5.2 billion over the next 5-1/2 years in an attempt to win the $1.8 billion in federal loan guarantees. Those concessions disappeared with the rejection of the loan guarantee request by the Air Transportation Stabilization Board late Wednesday, leaving many of the employees receiving industry-leading wages.



Bankruptcy courts have the power to void labor and other contracts, though that can be a difficult and time-consuming process. UAL CEO Glenn Tilton told employees in a recorded message Friday that deeper cuts than those already negotiated and changes in work rules would be needed if the company was forced to reorganize in bankruptcy court. He didn't specify if management expected to win the deeper cuts in new negotiations or through court action.



Winning further negotiated concessions from the employees will be difficult. The airline's 13,000 mechanics voted against the concession package last week, despite strong support from their union's leadership. The Air Line Pilots Association said Friday it was surprised by Tilton's comments.



"We believe it is very premature to discuss these issues. ALPA is not interested in conducting our negotiations in the public forum," said the union's statement.

Jennyc

United is a good airline, with a lot of talented, hard-working, dedicated people in its employ. I hope that United emerges from bankruptcy as soon as possible, renewed and strengthened.

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Replying to:

Unfortunately, we all knew it was coming

--- --- --- --- --- --- --- --- ---

Replying to:

NEW YORK (CNN/Money) - United Airlines, the world's No. 2 airline, filed for bankruptcy protection Monday, succumbing to continued losses and staggering debt payments it could no longer afford to make, according to wire reports.

The decision to file for bankruptcy in the U.S. Bankruptcy Court in the Northern District of Illinois follows a weekend of meetings of the company's board of directors, and a warning from union leadership that the bankruptcy was "unavoidable and imminent."



The filing became a virtual foregone conclusion following rejection on Wednesday of United's request for $1.8 billion in federal loan guarantees. A three-member federal panel said that the airline's recovery plan depended on an unrealistic rebound in revenue, and that negotiated labor cost savings by the airline still left it with among the highest costs in the industry.



With United's parent, UAL Corp. facing the expiration of a grace period Monday on a missed $300 million loan payment, the airline executives said they had no choice but to seek protection from creditors.



The airline stressed it would continue to operate a normal schedule of flights and honor passengers' tickets and frequent-flyer mileage. The airline accounts for about 19 percent of U.S. air travel, with about 1,800 daily flights. According to sources close to the situation, it had arranged for about $1.5 billion in loans, known as "debtor-in-possession" financing needed to fund operations during a court supervised reorganization.



UAL had negotiated with union leaders for labor cost savings of $5.2 billion over the next 5-1/2 years in an attempt to win the $1.8 billion in federal loan guarantees. Those concessions disappeared with the rejection of the loan guarantee request by the Air Transportation Stabilization Board late Wednesday, leaving many of the employees receiving industry-leading wages.



Bankruptcy courts have the power to void labor and other contracts, though that can be a difficult and time-consuming process. UAL CEO Glenn Tilton told employees in a recorded message Friday that deeper cuts than those already negotiated and changes in work rules would be needed if the company was forced to reorganize in bankruptcy court. He didn't specify if management expected to win the deeper cuts in new negotiations or through court action.



Winning further negotiated concessions from the employees will be difficult. The airline's 13,000 mechanics voted against the concession package last week, despite strong support from their union's leadership. The Air Line Pilots Association said Friday it was surprised by Tilton's comments.



"We believe it is very premature to discuss these issues. ALPA is not interested in conducting our negotiations in the public forum," said the union's statement.

Jennyc