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While the bankruptcy filing likely will have no immediate effect on passengers, it will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee stock ownership plan.
United spokesman Chris Brathwaite declined comment beyond confirming the filing, which occurred shortly after 6 a.m. in U.S. Bankruptcy Court in Chicago. Court hearings were scheduled later in the morning.
The carrier's stock, which reached $100 a share in 1997, closed at 93 cents Friday on the New York Stock Exchange.
The bankruptcy restructuring is likely to result in fewer flights. Experts say frequent-flier miles and basic fare levels are likely to be retained for the short term, although fare hikes are likely over the longer haul.
The board of directors of United's parent company, UAL Corp., voted unanimously Sunday night to authorize the filing. The filing came as airline officials put final touches on $1.5 billion emergency financing to be obtained from several banks.
A spokesman for United's pilots union urged passengers Sunday not to abandon the airline during a bankruptcy filing.
"We're going to be flying airplanes today, tomorrow, next week and next year," pilot Herb Hunter said.
"This is going to be painful for the stockholders and the employees, but the airline's going to keep flying and we're going to come out of this stronger," he said. "The passengers shouldn't notice any difference."
The bankruptcy process is likely to take at least a year, according to airline consultant Robert Mann, who said Monday the company's management will have to take steps to keep the morale of United's workers from falling too low.
"It's certainly demoralizing to employees, and the risk is that it will somehow translate into less friendly service -- in effect getting customers in the middle of an emotional problem," said Mann, of R.W. Mann & Co. in Port Washington, N.Y.
On pace to lose an industry-record $2.5 billion this year, United had pinned its last hopes of avoiding bankruptcy on getting federal backing for $1.8 billion of a $2 billion loan that banks wouldn't otherwise provide. But the Air Transportation Stabilization Board, created last year to help the airline industry recover after Sept. 11, rejected United's request on Wednesday.
The linchpin to United's proposal was $5.2 billion in labor cutbacks by 2008, but the three-member federal panel said the airline's business plan was financially unsound and a loan guarantee would have risked U.S. taxpayers picking up the tab.
United has struggled even more than other airlines during the industry's worst-ever slump. The carrier already had lost about $1 billion since mid-2000 by the time of the attacks because of labor turmoil, the industry's highest costs and several failed strategies, including a costly and time-consuming bid to acquire US Airways -- itself now in Chapter 11 bankruptcy.
United cut service and laid off nearly 20,000 workers after the terrorist attacks, but it hasn't come close to making up for revenue lost from the drop-off in business travel.
United's filing dwarfs all other airline bankruptcies. The previous largest was by Continental Airlines in 1990. United listed almost $25.4 billion in assets as of Sept. 30 -- more than twice Continental's when it filed.
It also is one of the 10 largest bankruptcies in U.S. history -- a list topped by the recent failures WorldCom and Enron. It is the 11th time a major U.S. airline has filed for bankruptcy since deregulation in 1978, including TWA three times.
While the bankruptcy filing likely will have no immediate effect on passengers, it will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee stock ownership plan.
United spokesman Chris Brathwaite declined comment beyond confirming the filing, which occurred shortly after 6 a.m. in U.S. Bankruptcy Court in Chicago. Court hearings were scheduled later in the morning.
The carrier's stock, which reached $100 a share in 1997, closed at 93 cents Friday on the New York Stock Exchange.
The bankruptcy restructuring is likely to result in fewer flights. Experts say frequent-flier miles and basic fare levels are likely to be retained for the short term, although fare hikes are likely over the longer haul.
The board of directors of United's parent company, UAL Corp., voted unanimously Sunday night to authorize the filing. The filing came as airline officials put final touches on $1.5 billion emergency financing to be obtained from several banks.
A spokesman for United's pilots union urged passengers Sunday not to abandon the airline during a bankruptcy filing.
"We're going to be flying airplanes today, tomorrow, next week and next year," pilot Herb Hunter said.
"This is going to be painful for the stockholders and the employees, but the airline's going to keep flying and we're going to come out of this stronger," he said. "The passengers shouldn't notice any difference."
The bankruptcy process is likely to take at least a year, according to airline consultant Robert Mann, who said Monday the company's management will have to take steps to keep the morale of United's workers from falling too low.
"It's certainly demoralizing to employees, and the risk is that it will somehow translate into less friendly service -- in effect getting customers in the middle of an emotional problem," said Mann, of R.W. Mann & Co. in Port Washington, N.Y.
On pace to lose an industry-record $2.5 billion this year, United had pinned its last hopes of avoiding bankruptcy on getting federal backing for $1.8 billion of a $2 billion loan that banks wouldn't otherwise provide. But the Air Transportation Stabilization Board, created last year to help the airline industry recover after Sept. 11, rejected United's request on Wednesday.
The linchpin to United's proposal was $5.2 billion in labor cutbacks by 2008, but the three-member federal panel said the airline's business plan was financially unsound and a loan guarantee would have risked U.S. taxpayers picking up the tab.
United has struggled even more than other airlines during the industry's worst-ever slump. The carrier already had lost about $1 billion since mid-2000 by the time of the attacks because of labor turmoil, the industry's highest costs and several failed strategies, including a costly and time-consuming bid to acquire US Airways -- itself now in Chapter 11 bankruptcy.
United cut service and laid off nearly 20,000 workers after the terrorist attacks, but it hasn't come close to making up for revenue lost from the drop-off in business travel.
United's filing dwarfs all other airline bankruptcies. The previous largest was by Continental Airlines in 1990. United listed almost $25.4 billion in assets as of Sept. 30 -- more than twice Continental's when it filed.
It also is one of the 10 largest bankruptcies in U.S. history -- a list topped by the recent failures WorldCom and Enron. It is the 11th time a major U.S. airline has filed for bankruptcy since deregulation in 1978, including TWA three times.
