UA does not have access to the public capital markets and it appears the carrier and the rest of the industry has little ability for a sale and lease back of assets. For UA to obtain a loan guarantee, there must be five individual labor tentative agreements, a ratification period, ATSB application review, and a loan guarantee approval before November 17.
It appears that five weeks may not be enough time to accomplish this aggressive schedule and reports indicate the company and its advisors, bankruptcy experts at law firm Kirkland & Ellis and at investment-banking concern Rothschild North America, are preparing a formal petition.
There is very little time for employees and management, presumably the IAM and AFA to reach meaningful restructuring accords that in my opinion hold the key to bankruptcy avoidance. In addition, ALPA, IAM, and non-contract employees presumably have to give up their board seats and governance clause, for a loan guarantee to be approved. I believe this is a bitter pill for all, but from our experience at US I encourage the UA employees to make this sacrifice to reach 11th hour agreements to prevent a bankruptcy filing.
Enron, WorldCom, & US Airways filed their bankruptcy petition on a Sunday; therefore, some sources believe a UA bankruptcy filing could come as early as Sunday, October 13. If this does not occur, the next likely dates are October 20 or 27.
Chip