United on track despite $375M April loss

CHICAGO, May 29 (UPI) -- UAL Corp., parent of bankrupt United Airlines, posted a net loss of $375 million in April because of SARS and war in Iraq.

But Chief Executive Officer Glenn Tilton said the carrier may still be able to emerge from Chapter 11 protection earlier than mid-2004.

"We don't see any impediment to an exit from Chapter 11 earlier than the 18 months that we initially forecast but it is essential that we make the right choices," Tilton told employees in a taped message this week. "We're discussing timing with our lenders, the creditors committee, the board of directors and others who have an interest in providing United exit financing."

Although United lost $375 million last month, United Executive Vice President and Chief Financial Officer Jack Brace said the carrier had satisfied terms of its debtor-in-possession lenders for continued bridge financing. United's losses could not exceed $849 million from Dec. 1, 2003 to April 30.

April's operating loss of $297 million was significantly higher than in March.

A filing in U.S. Bankruptcy Court Wednesday showed United ended the month with a cash balance of $1.7 billion, compared to $1.6 billion at the start of April.

"The revenue environment for the entire industry was very difficult for the month, due to the full impact of the war in Iraq and the fear of SARS in Asia," a company statement said.

Since filing for bankruptcy in December, the airline has negotiated $2.56 billion in annual labor cost savings from its unions for six years and said air travel had rebounded and its cash receipts had returned to pre-war levels.

United added 162 flights for the summer travel season and expects to get $300 million in federal aid approved by Congress last month to help airlines pay for increased security.

Crain's Chicago Business said some United creditors are unhappy with UAL's strategy to create a low-fare, discount airline as part of its recovery plan.