ELK GROVE VILLAGE, Ill., May 21 (UPI) -- The chief financial officer of bankrupt United Airlines thinks he sees light at the end of the tunnel. Jack Brace said things are going so well that UAL Corp., United's parent company, could emerge from Chapter 11 protection as early as this fall, more than six months ahead of schedule.
"We see no impediment to an early exit," Brace told the Wall Street Journal Wednesday. "But we want to come out a completely fixed company, not a partially fixed company."
United filed for Chapter 11 protection from creditors on Dec. 9 and successfully renegotiated concessions contracts with all its major unions to save at least $2.54 billion a year. Overall, United has cut $4 billion in annual operating expenses.
The one-time nation's largest airline slashed jobs and fares and Brace said leaving bankruptcy protection early would be a public show of confidence that the carrier can avoid liquidation.
"But if you exit early, you can't necessarily get all that you want done in the time available," he said.
Brace warned that United could miss financial targets set by its debtor-in-possession lenders for continued financing if bookings slacked off. The Journal said the carrier had used about $800 million of $1.5 billion in available interim financing.
A business plan filed by UAL Corp. in U.S. Bankruptcy Court projected the airline would exit Chapter 11 by June 2004. The plan also called for creation of a low-fare discount airline "code-named Starfish" but that project remains up in the air.
Meanwhile, rival American Airlines is cutting fares and adding more seats on some planes as it struggles to avoid bankruptcy. The world's largest airline Tuesday unveiled a "Turnaround Plan" executives hope will put American in the black.
"With $4 billion in the process of being removed from our cost structure, American Airlines is going to be a leaner, stronger and more agile competitor," President and CEO Gerard Arpey told the annual stockholder's meeting in Fort Worth, Texas.
