Sorry guys, can't work out the original source - so as soon as I do, I'll remove the quote and post a link.
However, it's good news by the sound of it:
However, it's good news by the sound of it:
CHICAGO (AFP) - A US court approved United Airlines' plan to emerge from more than three years of bankruptcy protection in early February.
"We have come to the end of a long process," US Bankruptcy Court Judge Eugene Wedoff said in approving the plan by the airline's parent company, UAL Corp.
"Certainly not everyone can be happy -- the holders of UAL stock will see the stock cancelled ... and employees have seen their jobs cut."
But the judge said the solution proposed was the best available to save the nation's second-largest airline.
"Three years ago, United Airlines was in danger of dying," he said. "It used the Chapter 11 function as a means of restructuring so that once again it has the potential to be a profitable investment, a reliable business partner and a stable employer."
United, which had earlier set an exit target of February 1, said it must wait until the end of a 10-day appeals process before picking a date.
But since it had managed to reach agreement with the bulk of its creditors and no major objections were raised Friday, United ought to emerge from bankruptcy in "very early February," chief financial officer Jake Brace told
reporters.
Brace said the airline is now in a strong position to compete in a domestic market that he characterized as overcrowded and beset by high fuel costs.
"The industry needs to consolidate," he said. "What our restructuring has done is give us the ability to participate or not, but we can do it on our own terms."
United, which kept flying through the bankruptcy and labor unrest, is now a smaller and leaner company.
It has dramatically reduced the size of its fleet, laid off 20,000 employees and slashed seven billion dollars in annual costs.
The Chicago-based airline has also reorganized its services to offer more lucrative international flights and to cut the frequency of its domestic flights.
But the process has alienated a number of its remaining 57,000 employees, who have seen their salaries and benefits slashed.
The most controversial move was to terminate the airline's pension plans, which were underfunded by seven billion dollars. It was the largest pension default in US history and left a government insurance fund responsible for managing the plan.
Under the terms of the plan's termination, existing retirees saw their benefits capped, while current employees saw their potential retirement savings cut substantially because they would no longer be able to contribute to the pension plan and would thus collect significantly lower payouts.
United subsequently negotiated retirement savings, or defined contribution plans, with all of its unions, which make up for much of the loss.
Another controversial move was to award a big equity stake to the airline's managers. Under the restructuring plan, eight percent of the new shares of the company will go to about 400 senior-manager-level employees.
United originally asked for 15 percent of the new company's 125 million shares to be given to management but backed down after a number of
creditors, including the unions, objected.
With United's stock expected to trade at about 15 dollars, the total package is estimated to be worth 150 million dollars.
"The only legacy cost that remains at United Airlines is executive
compensation," said Sara Nelson Dela Cruz, a spokeswoman for the flight attendants' union.
"Management started this bankruptcy with a promise of shared sacrifices. It's disappointing that our courts allowed this disparity of treatment."
United filed for bankruptcy protection in December 2002, overwhelmed by heavy operating costs, skyrocketing fuel prices, fierce competition from low-cost carriers and a sharp drop in travel following the September 11, 2001 terrorist attacks.
It was the ninth-largest bankruptcy in US history, affecting some 25 billion dollars in assets, according to Bankruptcydata.com.
