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Tue, Feb 04, 2003

UAL Making Deals

Airports Don't Want to Foot the Bills for 'Deadbeat' Airline

United has asked the Bankruptcy Court for six more months, to figure out just which airport gates and other facilities (if any) it won't want. In the meantime, the cities, 'cooperating' by court order, don't want United to skate on fees, until the airline makes up its mind; or until the Court renders some sort of formal decision.

Los Angeles, according to the Nando Times, says United already owes it over $2, for December and January; and it doesn't want to have United have the very real chance to operate there for free, for what could be six months more -- or longer. Other airport managements, including those in Detroit and Cleveland, are equally concerned.

Under Chapter 11 of the US Bankruptcy Code, United may have the court-sanctioned privilege to break leases on gates, terminal space, etc. The official deadline (60 days from filing Chapter 11) is Friday; but United notes that these types of decisions, especially when balanced against other big logistical decisions (like mothballing aircraft, or not accepting contracted-for planes), is taking longer than it would like.

On the other hand, the airports argue, United, by the very nature of its being protected under Chapter 11, has already called in a lot of goodwill; and the airports have bills to pay, as well.

If nothing else, the airport managers would like United to be compelled to at least pay its current bills, as it makes up its mind.

FMI: www.ual.com

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