United files plan to leave bankruptcy Feb. 1

CHICAGO — United Airlines intends to emerge from bankruptcy in February as a much more financially sound carrier than the one that has been restructuring under court protection since 2002, parent UAL Corp. said Wednesday in filing its long-delayed reorganization plan.

The airline now faces months of hearings at which investor groups are expected to jockey for higher portions of its limited assets.

CEO Glenn Tilton, who joined the company shortly before the bankruptcy filing 33 months ago, pronounced the restructuring successful and declared “the countdown has begun” toward a Feb. 1 exit from Chapter 11 bankruptcy.

“After three years of a very complex and difficult restructuring, there is confidence that a competitive United Airlines can manage through the challenges the industry will face,” he said in a recorded message to employees, who have endured significant pay and benefit cuts as part of the overhaul. “United Airlines is now positioned to compete effectively.”

Still awaited is United’s return to the black after nearly $3 billion in net losses in 2005 and over $10 billion in the last five years.

The company projected operating income of $916 million in 2006 and an overall net profit based on a forecast of 4 percent higher revenue, and said income and revenue should rise steadily through 2010. But those projections assume oil prices average $50 a barrel — far lower than Wednesday’s price of $64.37.

UAL maintained that higher prices would be met with compensating fare increases or capacity reductions within the industry.

The huge filing in U.S. Bankruptcy Court mostly outlines the company’s proposals for repaying creditors and recounts its restructuring moves, omitting any detailed discussion about management’s vision for United’s future or its long-term operating strategy.