Translated from Dutch.
http://www.luchtvaartnieuws.nl/news/?ID=12082
United Airlines leaves C11 early february23-01-2006
CHICAGO – Early February UA will leave Chapter 11 bankruptcy protection. The juridical control over UA’s financial tasks can be removed. This was reported UA following the approval of their reorganization plan by bankruptcy lawyers.
“Over 3 years of hard work to save UA is rewarded with this approval. It has made us ready to compete succesfully with the strongest airlines” says UA CEO Glenn Tilton. Since december 2002 UA has been under bankrupty protection, which it will now leave february 1st.
In particular share holders have helped to take UA out of their problems. Staff too gave large sacrifices: the number of employees was reduced from 83000 to 58000 now. The number of planes was reduced from 570 to 460. Debt was reduced from 30 billion to 17 billion.
So, who is taking bets for how long they will last? 😀
Best of luck to UA. It will be hard though, 17 billion debt is still a whole lot!
By: bkonner - 25th January 2006 at 02:12
Howdy,
I find it offensive the huge pay-day management got or will get when UA exits chp 11. The shareholders (employees) were screwed! US business, you gotta love it!
bkonner
By: greekdude1 - 25th January 2006 at 00:03
I thought the TED LCC was made up of A320’s pulled from the UA side of the operations?
It is WD. UA/Ted hasn’t purchased any ‘new’ aircraft in quite some time. The forming of Ted had absolutely nothing to do with being recognized as a brand new carrier to purchase new planes.
By: Whiskey Delta - 24th January 2006 at 02:17
I thought the TED LCC was made up of A320’s pulled from the UA side of the operations?
By: andrewm - 23rd January 2006 at 23:52
Cant order aircraft or buy new ones already on order either AFAIK. Hence why some orders with i think Airbus where dropped by United and then UA are opening new loco feeder as it can buy aircraft as new company.
By: Whiskey Delta - 23rd January 2006 at 22:20
Is this good news for united? Would/does an airline benefit from being in Chap. 11 or is there an incentive to get out of it?
An airline is protected from their creditors in Chap. 11. It gives them time to reorganize their financies without the fear of their assets being repossessed. They still have to make payments but at reduced/renegotiated rates. The company also has leverage over their contracts with employees and others where they can basically get them thrown out and have new rules implimented.
The incentive to get out if it is that it frees them from the restrictions placed upon them when in Chap. 11. I don’t know much about them but for example a company can’t hedge fuel and has to pay current market prices.
By: philgatwick05 - 23rd January 2006 at 21:52
Is this good news for united? Would/does an airline benefit from being in Chap. 11 or is there an incentive to get out of it?
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January 23, 2006 at 7:27 pm