United out of bankruptcy, profits elusive

CHICAGO, Feb. 1 (UPI) -- The parent of Chicago-based United Airlines ended 38 months in bankruptcy Wednesday, having cut its annual costs by $7 billion.

UAL Corp. began issuing common stock shares Wednesday, with most shares going to the company's former unsecured creditors. Trading of these shares, which will be listed on NASDAQ under the ticker symbol "UAUA," will begin Thursday.

"Today, we have the business platform we need to compete with the strongest carriers and a clear strategy of offering the right service to the right customer at the right price," said Glenn Tilton, United's chief executive officer.

Many analysts doubt that United is in any immediate position to turn a profit because jet fuel prices are higher than United expected. Rather than spending $3.4 billion on jet fuel, it expects to spend $4.3 billion on jet fuel.

"They're not making any money," Roger King, an analyst at CreditSights, said of United. "Normally you'd think, when you leave bankruptcy, you'd be making money."

King said United's costs remain very close to those at American Airlines and Continental Airlines, two carriers that have chosen to try to streamline outside of bankruptcy court. "(United officials) didn't distance themselves from American and Continental," he said.