This was in the San Francisco Chronicle this morning. Interesting Bay Area perspective on the changes since last year.
United -- one year later
How the airline has flown the turbulent skies
David Armstrong, Chronicle Staff Writer Sunday, December 14, 2003
When UAL Corp.'s United Airlines filed for Chapter 11 bankruptcy protection on Dec. 9, 2002, the world's second-largest carrier faced a ride so bumpy, some airline industry observers thought United might disappear altogether.
After a year of painful restructuring, the airline's prospects for survival have improved, although the turmoil it created has left its mark on a much-changed company.
Pressed by a need to curb its high operating costs, United has extracted $5 billion in savings from employees and vendors and slashed its workforce to 63,000 from 100,000 just before the Sept. 11, 2001, terrorist attacks.
In addition, it has petitioned Congress and the Internal Revenue Service for relief from having to make accelerated payments to its pension plans, dissolved an employee stock ownership plan that had given organized labor a big say in running the airline, and announced plans to start a low-cost carrier in February to challenge upstart rival discount carriers.
United also continues its slow but apparently steady journey out of Chapter 11. On Wednesday, the company reportedly landed commitments from J.P. Morgan Chase and Citigroup, its leading debtor-in-possession lenders, for $2 billion in exit financing, which UAL hopes will allow it to leave Chapter 11 by the middle of next year.
"They will definitely emerge from bankruptcy. The pressing question is whether they will emerge as a handicapped company or a very healthy and strong company,'' said bankruptcy attorney Martin Zohn, a partner in the Los Angeles office of the Proskauer Rose law firm.
"You can cut costs, but there is only so far efficiency and reduced capacity can take you, especially in a shrinking industry. Right now, the aviation industry is waiting for a turnaround in passenger levels,'' Zohn said. "United is presently battening down the hatches and surviving until the recovery comes.''