- The Washington Times - Saturday, October 19, 2002

CHICAGO (AP) United Airlines' parent company yesterday posted its second-biggest quarterly loss to date $889 million and forecast even worse results in the fourth quarter amid bleak industry conditions.
On a day that it ran its money-losing streak to nine straight quarters, UAL Corp. held out cautious hope it can stay out of bankruptcy court, citing "good progress" in talks with unions on a newly targeted $5.8 billion in labor concessions.
The huge proposed cutbacks still must be negotiated individually with all five unions, and the cuts may or may not be enough to achieve the immediate goal: persuading the government to provide a sorely needed $1.8 billion loan guarantee.
But the announcement confirmed that United and its unions have reached key agreement after weeks of talks on an overall total and time frame 5 years for unprecedented concessions. United also said it has developed a plan to save an added $1.4 billion annually in revenue and non-labor expense improvements.
Despite the continued hemorrhaging of cash at the nation's second-largest airline, new Chief Executive Officer Glenn Tilton insisted that "at this point, nobody should consider a Chapter 11 filing inevitable."
The clock is running down, however. United, which had $1.66 billion in unrestricted cash at the end of September, faces $875 million in debt payments by Dec. 2 and has been going through cash at a worsening rate that averaged $7 million a day in the third quarter.
United said it would revise its loan guarantee application with the Air Transportation Stabilization Board next week with an updated business plan that includes details on discussions with labor groups, lenders and suppliers, and planned cost cuts. The federal loan guarantee program expires Dec. 31.
"Absent a meaningful cash infusion or restructuring of its $875 million obligation, we do not believe United has enough cash to survive the winter," said Jamie Baker, an airline analyst for J.P. Morgan.
The latest loss amounted to $15.57 per share, compared with the record $21.43 loss a year earlier.


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