By Kathy Fieweger CHICAGO, May 13 (Reuters) - United Airlines makes no secret of the urgent need for a broad-based financial recovery plan to return to financial health, but so far details have been elusive, airline experts said, depressing both the company's public debt and equity prices. On Friday, shares of United parent UAL Corp.(UAL) were trading near the low of $9.40 hit in November, dragged lower along with stocks of other major carriers when rival US Airways Group Inc.(U) warned of a potential bankruptcy filing. US Airways' shares continued lower on Monday, but UAL rebounded more than 20 percent to $11.66 after a Wall Street analyst upgraded it to a buy rating, citing an impressive route network that will help when the industry recovers. UAL's stock has underperformed the American Stock Exchange Airline Index by 48 percent since Sept. 11, however, tripped up by labor problems and management turnover. Like US Air and other carriers, UAL's unsecured debt is trading at "distressed" levels. As a result, UAL does not have access to the public market for unsecured debt financing, said several airline experts, although it could perhaps turn to higher class aircraft-secured tranches of debt financing. "I don't think people that people would argue that United doesn't have access to the unsecured market," said one source familiar with the company's finances. Costs at United are among the highest in the industry. Both pilots and machinists receive top pay, while flight attendants' wages are tied to an industry average. The airline wants all employees to give pay cuts but has a tough task getting them given a rocky history including strikes and slowdowns. "It really is just a dysfunctional organization, that is the problem," said another Wall Street source. NO COMMENT ON BANKRUPTCY United for eight months has steadfastly refused to discuss turning to the courts for a reorganization, instead saying it is focused on an undisclosed financial recovery plan. Jake Brace, chief financial officer, on Monday declined to comment on whether a bankruptcy filing would be considered. Executives at UAL, which has lost billions of dollars, have said several times the No. 2 U.S. carrier might apply to the federal government for guarantees to private sector loans. "Can they squeak by without the government money and what does 'squeak by' mean?" asked Richard Bittenbender, vice president and senior credit officer at Moody's, the credit rating agency. "It would be inappropriate for management to run the company close to the edge." According to a banking source familiar with United's finances, the carrier's adjusted debt-to-EBITDAR ratio (earnings before interest, tax, depreciation, amortization and rent) is by far the highest in the industry at 40 to 50 times. Such a ratio is closely monitored by lenders in the market for corporate financing that is not backed by aircraft. EBITDAR generally equates to cash flow from operations, although there are some differences. US Airways' ratio, by comparison, is 30 times, with Delta Air Lines(DAL) at 10 times and AMR Corp.'s(AMR) American Airlines at 15 times, said the source, who asked not to be identified. "Faced with a Chapter 11 bankruptcy, maybe the unions would come around. The unsecured bond market is very skittish to do anything with United right now." United has about $950 million in debt coming due later this year, nearly a third of its current $3 billion in cash. Brace said United has $3 billion in cash and $3.5 billion in unencumbered aircraft. "We don't have any plans right now one way or another" to turn to the secured market, he said. NO BLUEPRINT The Bush administration set up the unprecedented $15 billion aid program after the Sept. 11 attacks on New York and Washington immediately cut travel demand in half, leaving airlines hanging by a thread. How much money United would need and what it would give in return for such backing are unknown. So far, the only U.S. carrier to get the government to promise to repay loans is America West Holdings Corp. (AWA), parent of No. 8 America West Airlines. It gave the government the right to take a one-third equity stake. United is already 55-percent owned by employees after a 1994 Employee Stock Ownership Plan. The ESOP also gave two board seats to pilots and machinists and made for some difficult corporate governance issues including CEO approval. The latest chief executive of UAL, Jack Creighton, came on board in October after angry labor unions ousted his predecessor. He has said he will move on once a successor is found even though the airline is not yet financially stable. In a recent interview with Reuters, Creighton admitted he underestimated the labor problems and grudges held against management. So far, replacement names have been thrown about but an appointment is expected to take six months or more. "We've got to get out there in the field and convince people one, of our sincerity and two, that they have a critical role in the future success of this company," Creighton said. "I think that people's memories here are a lot longer, there's less of an ability to let go of the past." Since the Sept. 11 attacks on New York and Washington, UAL reported a net loss of $2.1 billion in 2001 and another $510 million in the first-quarter of this year. It will not predict when it will start to generate cash or a profit. ©2002 Reuters Limited.