Airline carries on flying after filing for bankruptcy

Crisis-hit United Airlines sought to reassure passengers and staff today after filing for bankruptcy court protection in the US.

The group said flights in and out of London Heathrow would continue as normal and its 2,000 UK workers would be paid to the “usual timelines”.

But cabin crew and check-in staff face an uncertain Christmas as the airline looks to cut costs and save cash in the coming months.

United is on track to lose an industry-record $2.5bn (€2.48bn) this year after a series of setbacks.

Flawed strategy, the slumping US economy and the impact of the September 11 terror attacks have all left the business reeling.

It applied for Chapter 11 bankruptcy protection after finding itself unable to meet debts of $1bn (€0.99bn) due this week.

Chapter 11 frees a company from the threat of creditors’ lawsuits while it reorganises its finances over an agreed time.

But a bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee share ownership plan.

United employs 83,000 staff worldwide and they own 55% of the business. The shares, which hit $100 in 1997, closed at 93 cents on Friday.

In an official statement, the group said it would continue to pay salaries and benefits as well as its overseas suppliers.

United’s senior vice president international Graham Atkinson added: “United Airlines continues to fly from all of its international destinations.”

The Chicago-based airline, which operates 1,700 flights a day, holds 17 slots at Heathrow and Irish people use it regularly to go to the US after getting a connecting flight to London.

It struck up a code-sharing agreement with bmi British Midland two years ago - which operates a Dublin/London leg. The group said bmi would not be affected.

United axed 20,000 workers globally in the aftermath of September 11 but has not come close to making up the revenues lost since the attacks.

The board of directors at its parent company UAL Corp voted unanimously on Sunday night to authorise the bankruptcy filing.

The move came as airline officials put the final touches on emergency debtor-in-possession financing to be obtained from several banks.

This $1.5bn (€1.48bn) of funding would give United cash to keep flying and the lenders first claim on the assets.

Today’s filing was one of the 10 largest bankruptcies in US history and is by far the largest airline bankruptcy.