CHICAGO, May 13 (Reuters) - Shares of United Airlines parent UAL Corp. (UAL) rose sharply on Monday as it moved forward on gaining employee wage concessions, while US Airways (U) stock plunged after the airline said bankruptcy reorganization is possible if a restructuring fails. UAL shares jumped as much as 25 percent to $11.90 in early trade after weekend approval of labor contracts signaled concession talks are near and Goldman Sachs airline analyst Glenn Engel raised his rating to "trading buy" from "market outperform." The stock had closed on Friday at $9.50, just above its record low of $9.40 set in November. Engel wrote that the market overreacted in punishing airline stocks, particularly UAL, after weak April industry revenue even though the No. 2 U.S. carrier behind American Airlines boosted liquidity, reached a labor contract, and improved service. "We cannot imagine an industry recovery that leaves out United, which has the industry's most attractive network," Engel wrote. US Airways shares fell as much as 37.5 percent to $2.25 -- their lowest level in more than 20 years -- early Monday. They have lost more than half their value since the No. 6 U.S. carrier said on Friday it would seek bankruptcy protection if a restructuring and government loan guarantee application fails. The stock was off $1.01 at $2.59 later in Monday's session. US Airways shares have fallen 76 percent since the Sept. 11 attacks on the United States and underperformed the American Stock Exchange Airline index (XAL) by 66 percent. UAL has fallen 62 percent and underperformed the airline index by 45 percent since Sept. 11. "A government loan guarantee would be very helpful to US Airways given its liquidity issues and the unavailability of capital," Merrill Lynch airline analyst Michael Linenberg wrote in a research note. However, Linenberg said it could be argued that US Airways as a franchise might be better off going through bankruptcy reorganization given its high costs. US Airways has the highest fixed costs among the major carriers and far fewer regional jets than its major hub competition, No. 3 U.S. airline Delta Air Lines (DAL) and fifth-ranked Continental Airlines (CAL). "It is unlikely that US Airways files for bankruptcy, at least not in the next quarter or two, given its cash position and minimal burn rate," Linenberg wrote. "Of course, this view assumes that the current revenue environment continues to show modest improvement and that nothing dramatic occurs around the world." Airlines face a June 28 deadline to file for loan guarantees under the federal aid package approved last fall. ©2002 Reuters Limited.