UAL: Bankruptcy Filing Not an Option
Friday December 21, 9:03 PM EST
By Kathy Fieweger
CHICAGO (Reuters) - UAL Corp.'s (UAL) United Airlines said on Friday it was exploring all options to return the company to financial stability, but ruled out a possible bankruptcy filing, as President Bush moved this week to avert a possible mechanics strike until next year.
Spokeswoman Susana Leyva told Reuters while "everything is on the table," at the airline, a report in Friday's Washington Post that a bankruptcy filing was an option was not accurate.
"I'm denying that it's part of the plan that we're looking at now," she said. "It is wrong. We are meeting with the unions very cooperatively to look at a comprehensive plan for the next six months. Bankruptcy is not part of that process."
The company's 15,000 mechanics, represented by the International Association of Machinists, last week authorized a strike as their contract remains unresolved. They last received a pay raise in 1994. But the White House appointed a special board to give the carrier time to work out its labor dispute after the critical holiday period is over.
Mechanics rejected an arbitration offer in November.
New UAL chief executive John Creighton told reporters on his first day on the job that he had no intention of presiding over a bankruptcy filing as he planned to work with unions to put the company back on the right track. The former CEO, James Goodwin, was ousted after employees criticized him for sending a letter saying the airline could perish next year unless losses stopped.
UAL is the No. 2. U.S. carrier, which had two planes hijacked and crashed on Sept. 11. Two American Airlines (AMR) planes were also taken over and destroyed, throwing the entire airline industry into chaos that has yet to abate.
UAL reported a record third-quarter net loss of $1.16 billion, far exceeding losses posted by other carriers as travel demand remains below normal levels.
On Friday, shares of UAL closed 8 percent higher on the New York Stock Exchange to $13.02, up 97 cents, as the entire airline sector staged a rally.
©2001 Reuters Limited.