A Reuters news service report led yesterday with a statement that "Bankrupt United Airlines... said for the first time publicly that liquidation is a 'distinct possibility.'"

Bookings, already slowed by the airline's persistent bad news, have dropped. International bookings in the past week, the company claimed, have dropped by about 40%.

The talk of liquidation apparently was pulled for the airline's 1113(c) filing Monday, that tried, in the strongest terms possible, to convince the Bankruptcy Court to cancel United's union contracts. It said, "With war-related jitters increasing and fewer people purchasing tickets, United's near-term revenue forecast through June 2003 has deteriorated by $298 million from projections made just weeks ago." That wasn't all: "At the same time, the cost of fuel, United's second-largest operating expense, has gone in the opposite direction," they reminded the Judge.

It's not that United is somehow unique in that position; all the airlines are witnessing leaner bookings. United (and US Airways, also in Chapter 11) are prohibited, though, from entering forward contracts for fuel, meaning that UAL and USA are particularly hit by the vagaries of the fuel market. [Of course, there is no guarantee that, when fuel prices come down and UAL isn't obligated to honor contracted prices, that UAL won't be looking relatively better than other, non-Chapter 11 airlines --ed.]

The dire warning that got CEO Jim Goodwin fired a year and a half ago -- that, without major union concessions, United would soon be facing its end -- now appears to be the official company line. "Can you hear me now?" Goodwin must be asking...

FMI: www.ual.com