- The Washington Times - Saturday, August 3, 2002

CHICAGO (AP) United Airlines' stock plummeted 20 percent yesterday on a new round of published speculation about the chances that its protracted financial struggles might send it into bankruptcy.
The catalyst for the latest sell-off was a report in Business Week magazine that United is in dire need of a government rescue to avoid bankruptcy. It also said the nation's No. 2 airline had retained bankruptcy lawyers.
Shares in United parent company UAL Corp. fell $1.07 to close at $4.15 on the New York Stock Exchange, down 88 percent from a year ago.
United spokesman Joe Hopkins confirmed that bankruptcy lawyers had been hired, although he said it occurred shortly after last year's terrorist attacks not earlier this year, as the magazine reported.
He declined to discuss the prospects of bankruptcy.
United Chief Executive Officer Jack Creighton acknowledged to employees in a specially taped message that the carrier's economic situation is "difficult."
But, while also avoiding any specific comment about the chances of bankruptcy, he characterized much of the talk swirling around the airline's plight as "rumors and so-called informed opinions."
"The one thing we know for certain is that United Airlines will continue to fly through it all," Mr. Creighton said in the message, recorded Thursday evening after he learned of the magazine report.
He said the carrier is working hard to improve its cost and revenue problems and is coordinating with the government on its pending loan-guarantee application.
United last month reported a second-quarter loss of $341 million, attributing it to widespread fare reductions by discount air carriers and limited spending by business travelers. The carrier warned it would post losses for the remainder of the year after losing an industry-record $2.1 billion in 2001.
Among United's concerns is paying a $900 million debt due in the fourth quarter.
The Elk Grove Village, Ill., airline asked the federal government in June to back 80 percent of a $2 billion loan. The government has made $10 billion in loan guarantees available to airlines to help carriers in the wake of the terrorist attacks.

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