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United Airlines Files for Bankruptcy Protection - 2002-12-11

United Airlines, the word’s second largest airline, has filed for bankruptcy, the biggest airline bankruptcy in history. The U.S. based carrier will stay in operation while it attempts to reorganize under protection from its creditors by the U.S. bankruptcy court. United Airlines chairman Glenn Tilton was upbeat when he met with employees and passengers at O’Hare airport in the Midwest city of Chicago.

“We should consider this for employees and United, chapter one. This really is a new beginning because we do get the opportunity to go back and do exactly what the gentleman was asking with respect to restructure.”

The airline has lost four billion dollars in the last two years. The slumping economy and the decrease in air travel since the September eleven terror attacks are being blamed. Terrorists used two United jets in the attacks on New York and the Pentagon. Mr. Tilton said United is stronger than other companies that struggled after filing for bankruptcy.

“I think United’s core strengths are extraordinary. I think that post nine-eleven, there has been a significant deterioration of those strengths and our cost structure simply couldn’t abide the change in the market place.

United had asked for a 1.8 billion federal loan guarantee to help wipe out a nine hundred million dollar debt payment, but the request was rejected last week. United airline pilot Herb Hunter says it’s been a tough day.

“All of the employees here at United worked together to come up with a plan that we know in our hearts would have worked.”

Mr. Tilton expects the bankruptcy reorganization will take 18 months.