August 26, 2005
Bankrupt United Airlines says banks and other lenders have come through with critical commitments, meaning the struggling carrier has up to $3 billion in needed financing. With the new cash and credit, United said it expects to emerge from bankruptcy by early next year, if not sooner.
According to documents filed with the bankruptcy court, United has lined up funding from Deutsche Bank, JP Morgan, Citibank and GE Commercial Finance. Also contributing to optimism at United was the latest operating report, showing the airlines operating profit in July rose to $113 million, despite a huge increase in the costs of jet fuel.
Analysts say the banks are betting on United because of its underlying strength on the highly profitable international routes. Its also gone through the painful process of renegotiating labor contracts, with many long-term adjustments already secured.
Court documents show United sold out nearly 87 percent of its flights in July, its highest level ever for the month. United declared bankruptcy at the end of 2002 after it was severely impacted by the slowdown in air travel following the September 11, 2001 terror attacks against the U.S.
