hogdriver00
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UAL ups savings target
Bankrupt airline said to tell unions it needs $2.4B in annual labor concessions.
December 16, 2002: 6:10 AM EST
NEW YORK (Reuters) - UAL Corp.'s United Airlines, which filed for bankruptcy-court protection a week ago, has told its unions it needs to secure agreements on $2.4 billion in annual labor concessions by mid-February, according to one union, the Wall Street Journal reported Monday.
That figure eclipses the $1 billion in annual savings the unions earlier agreed to in the hope of winning a government bailout and avoiding Chapter 11. United (UAL: Research, Estimates) must meet stringent financial conditions imposed by its interim lenders, the report said.
The Association of Flight Attendants, which represents 23,000 United attendants, disclosed the $2.4 billion figure in a message to its members, the report said.
The nation's No. 2 airline told its unions that, without arranging the savings quickly, it won't be able to tap the second tranche of a $1.5 billion debtor-in-possession financing package that is allowing it to continue to operate.
Unless it achieves positive cumulative cash flow by next spring, its lenders could find UAL in default and sell the collateral backing the loan, which would push UAL into liquidation, the article said.
The U.S. Bankruptcy Court in Chicago has granted preliminary approval for UAL to draw down the first $800 million of the interim financing, augmenting the company's $800 million in unrestricted cash on hand.
Shares of United added 18 cents to $1.75 Friday.
Bankrupt airline said to tell unions it needs $2.4B in annual labor concessions.
December 16, 2002: 6:10 AM EST
NEW YORK (Reuters) - UAL Corp.'s United Airlines, which filed for bankruptcy-court protection a week ago, has told its unions it needs to secure agreements on $2.4 billion in annual labor concessions by mid-February, according to one union, the Wall Street Journal reported Monday.
That figure eclipses the $1 billion in annual savings the unions earlier agreed to in the hope of winning a government bailout and avoiding Chapter 11. United (UAL: Research, Estimates) must meet stringent financial conditions imposed by its interim lenders, the report said.
The Association of Flight Attendants, which represents 23,000 United attendants, disclosed the $2.4 billion figure in a message to its members, the report said.
The nation's No. 2 airline told its unions that, without arranging the savings quickly, it won't be able to tap the second tranche of a $1.5 billion debtor-in-possession financing package that is allowing it to continue to operate.
Unless it achieves positive cumulative cash flow by next spring, its lenders could find UAL in default and sell the collateral backing the loan, which would push UAL into liquidation, the article said.
The U.S. Bankruptcy Court in Chicago has granted preliminary approval for UAL to draw down the first $800 million of the interim financing, augmenting the company's $800 million in unrestricted cash on hand.
Shares of United added 18 cents to $1.75 Friday.
