"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
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.