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Friday, March 19, 2004
United Airlines may delay bankruptcy exit
CHICAGO -- United Airlines has pushed back its target for emerging from bankruptcy from June 30 to late summer as it awaits verdicts on its application for a federal loan guarantee and on pension reform legislation, a source said yesterday.
The nation's No. 2 carrier intends to propose a new target date to U.S. Bankruptcy Judge Eugene Wedoff before its monthly bankruptcy hearing today, said the source.
United spokeswoman Jean Medina declined to comment on the prospective delay, which was first reported in yesterday's editions of The Wall Street Journal and The New York Times.
The airline said when it filed for Chapter 11 bankruptcy in December 2002 after incurring more than two years of heavy losses that it expected to spend about 18 months in bankruptcy.
It spent 2003 slashing labor costs, negotiating new aircraft leases and obtaining $2 billion in financing from J.P. Morgan Chase and Citigroup, and told the court in January it was on track for a June 30 exit.
But the Elk Grove Village, Ill.-based carrier still has several issues to resolve.
The Air Transportation Stabilization Board, which rejected United's bid for a federal loan guarantee just before it filed for bankruptcy, has not ruled on its 3-month-old request for a $1.6 billion guarantee. The exit financing that United obtained hinges on the loan guarantee's being approved.
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