United Airlines, the second largest US carrier, said last night that it may file for bankruptcy this autumn if it cannot dramatically cut costs, its first such admission since losing record amounts of money after the September 11 attacks.
United said in a regulatory filing that it planned to refile an application with the Air Transportation Stabilization Board for $1.8 billion in federal loan guarantees, which would include a new business model.
But the carrier said there could be no assurances it would win such backing for private sector loans, even if it did reach cost-cutting deals with various groups.
The airline has given itself 30 days to cut the deals. So far, only pilots and salaried and management workers have agreed to pay cuts.
United's bankruptcy warning was just the latest bad news in the aviation industry this week.
On Sunday, US Airways filed for Chapter 11 bankruptcy protection as a historic downturn in US aviation continues to unfold. American Airlines said on Tuesday that it would lay off 7% of its workforce.
