Cloudy skies for US business partner UA

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May 18, 2003
Today the Rocky Mountain News reported:
"If you compare how they're doing to where they were last year, they're doing even worse," said Douglas Baird, who teaches bankruptcy law at the University of Chicago. "I don't know how soon these (lender) covenants will bite. The bottom- line reality is, you can't lose $600 million in a quarter continuously and thrive."
"My take on United as a whole is they're running a good airline operationally, but they just don't know where to put their aircraft to make money," said Josh Marks, associate director of George Washington University's Aviation Institute. "The travel market is coming back, and United has cut their labor costs," Marks said. "The question comes down to, where can they fly where they won't get hammered by low-cost carriers?"
Some analysts fear time is running short for UAL to figure that out. "I think what the future portends depends on what happens after about Sept. 15 when peak travel drops off and they are forced to depend on business travel," said industry consultant Bob Mann. "I have to say there is obviously some concern whether they'll meet those (lender requirements) at that time. It seems that particular hurdle (of exiting bankruptcy) is running away from them as fast as they're approaching it," Mann said.
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