United Airlines parent UAL Corp said it may seek bankruptcy protection later this year if the carrier can't cut costs and win a US loan guarantee to help pay US$875 million of debt due in the fourth quarter.
Paying the debt from reserves may leave the company with too little money for operations, UAL said in a filing with the US.
PHOTO: AP
Securities and Exchange Commission. The world's second-biggest carrier said it is revising its application for a US$1.8 billion loan guarantee to include more cost reductions and wants workers to agree to participate in the next 30 days.
Losses mounted at UAL and rivals after the Sept. 11 attacks, prompting US Airways Group Inc to seek bankruptcy protection Sunday and AMR Corp's American Airlines to say yesterday it will cut 7,000 more jobs. Chief Executive Officer Jack Creighton told workers this week that UAL's loan application has been coolly received in Washington and that bigger concessions are needed.
"Unless we lower our costs dramatically, filing for bankruptcy protection will be the only way we can ensure the company's future and the continued operation of our airline," Creighton said in a statement today.
UAL fell US$0.68 to US$2.06 at 6:06pm in off-exchange trading after the New York Stock Exchange closed, the lowest price since at least August 1980. Shares fell US$0.29, or 11 percent, to US$2.45 in NYSE composite trading at 4:19pm. The stock has dropped 92 percent since Sept. 10.
"Part of what this is intended to do is to get the pilots and the mechanics to start focusing on how serious this situation is," said Jon Ash, managing director of Global Aviation Associates, a Washington airline-consulting firm. "Given what US Air is doing, what American has announced -- maybe that all is creating a wake-up call."
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
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