UAL posts loss, four unions strike deal=20 =09 =09 Friday October 18, 4:21 PM EDT=20 (Adds analyst comment paragraph 11, closing stock price) By Kathy Fieweger CHICAGO, Oct 18 (Reuters) - UAL Corp. (UAL <http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DUA= L> ), parent of No. 2 U.S. air carrier United Airlines, on Friday reported an $889 million quarterly net loss on weak traffic and fares, capping a week of major airline losses. The airline, under the gun to cut significant deals with workers on wage and cost concessions or else file for bankruptcy, also said it was making progress on a newly disclosed target of $5.8 billion in savings over 5-1/2 years. UAL, struggling with high costs and lower demand for air travel, lost a record $2.1 billion in 2001 and another $850 million in the first two quarters of 2002. In the third quarter, it burned through an average of $7 million in cash per day as the industry's fledgling recovery vanished but still ended up with $2.0 billion in cash. The fourth-quarter cash burn rate will be even worse because of seasonally weak demand and revenue, United said, forecasting a significant loss for the fourth quarter and full year. =20 Shortly after the financial results were released, the pilots union said four of five unions had reached an agreement in principle to cut wages by "well over" $1 billion yearly as part of a $2.5 billion annual recovery program. That includes concessions from suppliers and other parties, too. United said it would file an updated business plan outlining such figures with the Air Transportation Stabilization Board next week. The agency is considering whether to grant federal backing for $1.8 billion of a $2.0 billion loan. But it wanted more cost cuts than the airline initially outlined in late June. NO TIME TO WASTE "Discussions with individual coalition members to finalize their component of the $5.8 billion are moving forward, but at varying paces," Chief Financial Officer Jake Brace said in a statement. "These discussions need to be brought to a quick resolution to achieve our common goal." UAL, which has warned of a possible autumn bankruptcy, said the third-quarter net loss amounted to $15.57 per share, compared with a net loss of $1.2 billion, or $21.43 a share, a year earlier. Revenue fell 9 percent to $3.7 billion. Before special items, the per-share loss was $8.82. Glenn Tilton, the new chief executive, said that bankruptcy was not inevitable, reiterating a point he made in September when he took over the top spot from Jack Creighton. Gary Chase, analyst at Lehman Brothers, disputed that notion. "We assign a high probability to a Chapter 11 filing in the next four weeks," he said. "We would not recommend purchase of the shares under any circumstances." PILOTS UPBEAT A pilots union official said he believed the savings outlined Friday would be enough to pull United out of its financial crisis. "When finalized, these historic employee sacrifices will stabilize the company and permit United to access critical lending through the ATSB and the general capital markets," said ALPA official and UAL board member Paul Whiteford. The International Association of Machinists has been the most outspoken in its belief that pay cuts may not be needed. However, on Friday, an IAM spokesman said ongoing talks with management about participating in the $5.8 billion in labor savings were "progressing well." UAL shares traded in a wide range on Friday, at one point dropping nearly 20 percent to $1.42 -- their lowest level in decades. Later, the stock recovered as word of the unions' deal spread. It closed at $1.71 on the New York Stock Exchange, down 1.16 percent. ROULETTE? Like Chase, other industry experts were not so sure United could get its house in order quickly enough. "Labor unions seem determined to wait to the last possible minute before accepting lower take-home pay," said Joseph Schwieterman, an airline expert at DePaul University. "That moment is rapidly approaching." With each passing day and week, Schwieterman said, bankruptcy becomes "almost inevitable." Susan Donofrio, airline analyst at Deutsche Bank, also said time was running out. "We also are somewhat skeptical that management will be able to achieve labor cost savings in time since they haven't done so thus far and it looks like their labor groups want to negotiate with management separately," she said. This week, seven of the top eight U.S. airlines posted a combined net loss of $2.2 billion, with only Southwest Airlines (LUV <http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DLU= V> ) making a quarterly profit -- $75 million. The largest net loss came from American Airlines parent AMR Corp. (AMR <http://money.excite.com/jsp/qt/full.jsp?time=3D0&symbol_search_text=3DAM= R> ), which posted a $924 million shortfall. On an operating basis, however, United's loss was slightly bigger at $503 million, compared with AMR's $475 million. UAL shares lost 81 percent of their value in the third quarter, while the American Stock Exchange airline index (XAL) fell about 54 percent.=20 =A92002 Reuters Limited.