antney
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Associated Press - United Files Chapter 11 Bankruptcy
Monday December 9, 7:18 am ET
By Dave Carpenter, AP Business Writer
United Airlines Files Chapter 11 Bankruptcy, Reeling From Heavy
Losses, Massive Debts
CHICAGO (AP) -- United Airlines, reeling from two years of heavy
losses and unable to pay off nearly $1 billion in debt that comes
due this week, filed for federal bankruptcy court protection Monday.
The Chapter 11 filing in U.S. Bankruptcy Court in Chicago is by far
the largest airline bankruptcy ever and one of the biggest in U.S.
history. The suburban Chicago-based company has lost $4 billion in
the last two years due to a slumping economy, flawed business
strategies and last year's terrorist attacks.
The airline has promised to keep flying while it sheds costs under
the auspices of a bankruptcy court judge and overhauls its business
plan to try to become profitable again.
United operates about 1,700 flights a day, or about 20 percent of
all U.S. flights. It has the most extensive worldwide route
structure of any airline.
While the bankruptcy likely will have no immediate effect on
passengers, protection from creditors 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.
