READY FOR TAKEOFF.

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Author: Arndt, MichaelGagnier, Monica

HEADLINER GLENN TILTON

Finally, an exit strategy for United Airlines. Nearly 32 months after Chief Executive Glenn Tilton put the carrier in Chapter 11 bankruptcy, United filed a reorganization plan on Sept. 7 to emerge by Feb. 1.

The plan, which still must be approved by creditors and a bankruptcy judge, relies on $2.5 billion in loans from a group that includes JPMorgan Chase and Citigroup. United might raise $500 million more by offering new shares to creditors. Since filing Chapter 11 in December, 2002, Tilton has slashed United's nonfuel spending by 18%, or $3 billion, by cutting jobs and wages, dumping pensions, and shrinking the domestic schedule. “We are now competitive with the best network carriers,” Tilton, 56, told employees.

But with fuel prices at record highs, United is still losing money. So are most of its peers. Indeed, analysts are warning that Delta Air Lines and Northwest Airlines may end up in bankruptcy before United's exit, as higher fuel costs consume the savings generated by operations cutbacks.

Copyright The McGraw-Hill Companies, Copyright 2005

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By Michael Arndt

Edited By Monica Gagnier