CHICAGO å- December 17, 2002 å- UAL Corp. (NYSE: UAL), the parent company of United Airlines, today restated its commitment to achieving consensual agreements with its labor unions regarding employee participation in the companyå‘s business plan to successfully emerge from Chapter 11 bankruptcy. United said that active discussions with its unions on cost reductions are continuing. The company has presented its plan and cost reduction proposals to the unions and the unions are now considering these proposals.
United also informed the U.S. Bankruptcy Court for the Northern District of Illinois and the company’s unions today that, in the absence of consensual agreements, it intends to file a motion under Section 1113 of Chapter 11 of the U.S. Bankruptcy Code late next week. While United will continue to work collaboratively with its unions, the filing of this motion would be necessary to ensure that United remains in compliance with the financial requirements of the company’s debtor-in-possession (DIP) financing agreements by seeking the Court’s assistance should the company and the unions fail to reach consensual agreements.
United’s DIP financing is structured such that the cost reductions must be in effect by February 15, 2003. In order for the company to be certain that it meets that deadline and avoids being in default of the terms of the financing, United must protect its ability to use the 1113 process by filing a motion with the court on December 26, 2002, in the absence of consensual agreements.
In the meantime, reaching consensual agreements with United’s unions remains a top priority, and United will continue to negotiate in good faith as the company proceeds toward December 26 and beyond.
United Airlines operates nearly 1,800 flights a day on a route network that spans the globe. News releases and other information about United Airlines can be found at the company`s website at www.united.com.