Chicago – United Airlines’ parent company said Thursday it has secured new commitments from banks for up to $3 billion in debt financing that should enable it to emerge from Chapter 11 bankruptcy by late 2005 or early 2006.
While the financing is not yet final, UAL Corp. hailed the revised proposals as a strong endorsement of the new business plan it formulated this summer, even as the steep increase in fuel prices continues to squeeze carriers’ bottom lines.
The commitments from the four financiers – Citibank, JPMorgan Chase & Co., Deutsche Bank and GE Commercial Finance – were disclosed as the Elk Grove Village, Ill.-based airline updated its status in a filing with federal bankruptcy court.
The latest evidence of the industry’s financial hemorrhaging came in a separate announcement Thursday when United said it registered a $274 million net loss for July.
That pushed its losses to $2.8 billion this year and more than $7 billion since it entered bankruptcy in December 2002.
Chief financial officer Jake Brace said the fact the lenders are willing to provide more than the $2.5 billion United sought testifies to the resilience of its new business plan even amid daunting conditions for airlines.
He said United is continuing to negotiate the cost and terms of the financing, but has fully underwritten offers it could put into place now.
