United’s parent company UAL Corp. lost $114 million in October and
did not meet the requirements for its debtor-in-possession
financing, the airline reported Nov. 30.
Fortunately for United, its DIP lenders have given the company a
waiver from the requirements for each month of the fourth quarter,
the airline said.
On Nov. 26, UAL needed and got the intervention of a bankruptcy
court judge to at least temporarily prevent a group of creditors
from repossessing 14 of the airline’s aircraft. The airline is
trying to renegotiate its aircraft leases.
Jake Brace, the airline’s executive vice president and chief
financial officer, said the airline is “actively reducing costs
across the business to ensure that the company continues to
maintain adequate liquidity.” That includes asking the bankruptcy
court to void its union contracts and let it impose pay cuts if the
unions don’t voluntarily agree to cost reductions by
mid-January.
