"Failure To Reorganize Would Be Devastating"

How close is United Airlines to falling into the Pit of Financial Despair?

Real close, according to the airline itself. And if that happens, United says, its employees, the airline industry and the public at large will suffer.

"The consequences of a failure to reorganize United would be devastating," said a bankruptcy court filing by United parent UAL Corp., as quoted in the Denver Post. "With the difficult circumstances facing other carriers, most of United's employees would be unable to find other jobs in the airline industry, especially not at other legacy (major) carriers."

The filing came as United tries to void its labor contracts, saying, without that ruling from the bankruptcy judge, it will lose a total of $804 million this year and $725 million next year.

That, the carrier said, could trigger liquidation and an end to United as we know it. "[A]irports would be left with empty gates," the airline said. A lot cities would lose all flight service, and "gone would be United's indispensable role in maintaining the competitiveness of the US airline industry.

"Failure to secure the proposed cost reductions would jeopardize United's future," United said in its filing. Its lenders would be able to foreclose on their collateral, which is "virtually all of the company's assets" not already tied up before the company filed for Chapter 11.

It's "all true," according to Darryl Jenkins, a visiting professor at Embry Riddle Aeronautical University in Daytona Beach, FL. He told the Post, "The people would not find other jobs in the airline industry," he said. "The stockholders are all wiped out anyway."

As for the airline's attempt to abrogate its labor contracts, Jenkins told the Denver paper, "Somehow or another you're going to have to find a way to do this and maintain the peace. These are very, very dangerous times."

Dangerous, perhaps, but also highly controversial. The Association of Flight Attendants, who rallied near the White House Wednesday, have already threatened a global strike if its contract with United is terminated.

FMI: www.united.com