United stock falls below a dollar

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United stock falls below a dollar

CHICAGO (AP) =97 United Airlines' stock sank below a dollar a share Friday=
 as=20
investors anticipated a Chapter 11 bankruptcy filing by the nation's No. 2=
=20
airline. Shares in parent UAL Corp. fell 16 cents to 84 cents a share in=20
morning trading on the New York Stock Exchange =97 the second day of a=20
selloff following the rejection of its request for a $1.8 billion loan=20
guarantee.
Sources familiar with the process, who spoke on condition of anonymity,=20
said United was preparing to file for Chapter 11 bankruptcy Sunday. The=20
carrier was completing the terms of a $1.5 billion debtor-in-possession=20
loan, the sources said. The loan would enable the airline to keep flying in=
=20
bankruptcy. United spokesman Rich Nelson confirmed Friday that the UAL=20
board plans to meet on Saturday, but he otherwise declined comment on the=20
airline's financial status or plans. Chief executive Glenn Tilton has said=
=20
the airline would continue to fly whatever choice was made. United makes=20
about 1,700 flights per day and has about 83,000 employees worldwide.=20
United's customers are uneasy, but many passengers seem willing to stick=20
with the carrier.

Karen Hagler, who was flying from Denver to San Francisco, said she hoped=20
United could stay afloat. "I think we need the airlines we have. We need=20
competition," she said. Tony Singfield, traveling from Denver to Montana,=20
said he flies United frequently but was worried about the attitude its=20
employees would have in the face of possible layoffs. "I've always had good=
=20
service with United and I know that service will continue to be good, but=20
the concern is just the attitude of the employees and how will they respond=
=20
to the situation," he said. United, the world's largest airline until=20
American overtook it last year, traces its problems to a drop in passengers=
=20
because of the weak economy and the September 2001 terrorist attacks, an=20
increase in competition from smaller discount airlines and failed business=
=20
strategies. Many employees blame management. "There is no business plan,"=20
said Mike Ommundson, a mechanic at Chicago's O'Hare International Airport.=
=20
"They brought in people with no airline experience" to manage the company,=
=20
he said. "You have no respect for them."

Other workers echoed his complaint, blaming executives for bringing in=20
mid-level managers from retailers. Like many other workers at United,=20
Ommundson accepted wage cuts and work rule changes for six years in=20
exchange for stock that would almost certainly be rendered worthless by a=20
bankruptcy. The company is now 55% owned by its employees. As recently as=20
October 1997, UAL stock traded at $100 a share. Other United workers said=20
they worry about the possibility of layoffs and benefit cuts as well. "We=20
have to have a decent life and take care of our families," said Daniel=20
Kaulback, a baggage handler at O'Hare. Germany's Lufthansa, which along=20
with United belongs to the 14-member Star Alliance of airlines, said=20
Thursday it was in talks about offering assistance to its embattled=20
partner. Lufthansa would want to secure any possible investment with assets=
=20
such as planes or real estate, said Thomas Jachnow, spokesman for Europe's=
=20
No. 2 airline. After the federal Air Transportation Stabilization Board=20
rejected the loan guarantee Wednesday, United's mechanics canceled a vote=20
Thursday on $700 million in wage-and-benefits cuts that the airline said=20
were needed to avert bankruptcy.


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