UAL Corp., United Airlines' parent company, filed its long-delayed reorganization plan yesterday, saying it aims to emerge from bankruptcy protection early next year.
Separately, Delta Air Lines Inc. said yesterday it is reducing capacity at its Cincinnati hub by 26 percent, a move that could result in 1,000 job cuts. The carrier also said it is boosting its international service.
UAL's filing, made in U.S. Bankruptcy Court, lays out the company's intentions for United and the 26 other, smaller subsidiaries involved in the restructuring. It also details proposals for repaying creditors.
The bankruptcy overhaul, initially expected to last 18 months, is now ensured to take more than three years -- complicated by higher fuel prices, the difficulties in obtaining two rounds of labor cuts and the failure to secure federal loan guarantees. United, the nation's second-largest carrier, filed for bankruptcy protection in December 2002.
"Today, we are more flexible, more efficient and more resilient. As a result, United is now positioned to compete with the best carriers and confront the challenges of a volatile industry," said Glenn F. Tilton, United's chairman, chief executive and president, in a statement accompanying the filing.
The plan is to be financed by a $2.5 billion, all-debt loan package from Citigroup Inc., J.P. Morgan Chase & Co., General Electric Co. and Deutsche Bank AG.
The company proposes issuing new common stock in UAL to settle the claims of unsecured creditors, many of whom likely will seek higher amounts. It also said it might offer unsecured creditors the opportunity to buy an additional $500 million in new stock, with the proceeds providing extra capital for the company to fund its operations or pay down debt.
Delta, the nation's third-largest carrier, said its moves include speeding up the removal of Boeing 767-200 jets -- the least efficient wide-body aircraft in its fleet. The carrier, which has piled up $10 billion in losses since January 2001, is fighting to avoid a bankruptcy filing.
Less popular flights early in the morning and late at night will be eliminated at Cincinnati/Northern Kentucky International Airport, airport spokesman Ted Bushelman said. The plan should not cause major problems for local travelers because some of those flights will be moved to the daytime when people like to fly, he said.
The hub, Delta's second-largest, is losing nine destinations served by Delta Connection carriers, Bushelman said.
Delta also said it will add more flights to Hawaii and new or expanded service to 41 international destinations.