United board for talks as union warns of bankruptcy
The United Airlines board of directors held a special meeting as union leaders acknowledged that a bankruptcy filing by the world’s second largest airline appeared imminent.
Airline spokesman Joe Hopkins said the meeting ended late Saturday afternoon. He did not comment further.
With the cash-strapped airline facing debt payments of $920m (€911bn) in the next few days, union leaders had said prior to the board meeting that a bankruptcy filing was unavoidable.
“It is ... with great disappointment that we are now certain a bankruptcy filing appears unavoidable and imminent,” Randy Canale and Scotty Ford, leaders of the Machinists’ union, told members in a letter posted on the union’s website.
And CEO Glenn Tilton, after meeting with union officials, had said on a company hot line that bankruptcy was becoming ”a more likely outcome.”
Tilton said United had arranged financing enabling it to continue flying during bankruptcy, but did not give details. The carrier was believed to have been seeking a $1.5bn (€1.48bn).
The board meeting came three days after the rejection of United’s request for a $1.8bn (€1.78bn) federal loan guarantee. The three-member Air Transportation Stabilisation Board ruled that United’s financial plans were unsound and that a loan guarantee would be too risky for taxpayers.
Following the board’s action, shares in parent UAL Corp. fell seven cents on Friday to close at 93 cents on the New York Stock Exchange.
United, the world’s largest airline until American overtook it last year, traces its problems to a drop in passengers because of the weak economy and the September 11 terrorist attacks, an increase in competition from smaller discount airlines and failed business strategies.
United makes about 1,700 flights per day and has about 83,000 employees worldwide.
