Source: Associated Press
Author: Michael Tarm

CHICAGO - United Airlines said Monday it has received four offers of debt financing worth as much as $2.5 billion to help the nation's No. 2 carrier emerge from bankruptcy.

United spokeswoman Jean Medina would not say which financial institutions had made the offers and said there was no schedule for when any final deal might be reached. Moreover, any such agreement would be based upon United realizing an additional $2 billion in savings on salaries, pensions and other operating expenses.

"They are contingent on us completing the work we've identified in our business plan," Medina said.

United expects to learn more about when it could receive the funds in about 90 days after it resolves pension and other business issues with employees. United has said it must replace its traditional pensions to exit bankruptcy - a position that has stoked unions' anger with the reorganization process.

United, a unit of Elk Grove Village, Ill.-based UAL Corp., is trying to rework labor contracts with its six unions in a bid to lower its operational costs, which the carrier says is critical to its planned exit from Chapter 11 bankruptcy. The unions already agreed to a combined $2.5 billion in concessions two years ago.

It was unclear if lenders would insist the company first revolve all outstanding labor issues with its workers before any of the money is released.

But one analyst said such resolutions on labor costs would almost certainly be a condition.

"These other things have to be solved before (United) can close the deal," said Calyon Securities airline analyst Ray Neidl. "I can't imagine (lenders) would do it until those things are resolved."

He said the debt-financing offers were a good sign for the ailing carrier, which filed for bankruptcy in December 2002.

Last summer, federal officials rejected United's bid to win a government loan guarantee, forcing the company to seek private financing.

Chief Executive Glenn Tilton has said he anticipates the company leaving court protection this autumn.