UAL warns of $725 mln loss without labor savings CHICAGO, Dec 15 (Reuters) - UAL Corp. <UALAQ.OB>, parent of bankrupt United Airlines, will suffer a $725 million operating loss in 2005 unless it can wring additional savings from its labor force, according to documents the airline filed with federal regulators on Wednesday. That loss contrasts with a $1.27 billion profit the No. 2 U.S. carrier had projected earlier. United on Wednesday also forecast a $26 million operating profit in 2006, down from earlier projections for a profit of $1.72 billion. United is negotiating with its unions to cut labor costs by $725 million beyond the $2.56 billion it already won in concessions early in its bankruptcy process. The carrier has asked a bankruptcy judge to consider canceling its union contracts to save money. "United risks being unable to reorganize without additional labor cost reductions," the company said in the filing. "Failure to secure the proposed cost reductions would jeopardize United's future." The documents United filed with the U.S. Securities and Exchange Commission were also filed with the bankruptcy court before a hearing scheduled for Friday. The airline has been operating in bankruptcy for two years. United said that without labor savings beginning in mid-January, its cash balance would fall below $900 million and remain below that level through most of the first and second quarters of 2005. It projected its cash balance by May would fall below the $750 million minimum threshold outlined in the terms of its bankruptcy financing. The outlook beyond early 2005 is no more promising, United said. Without canceling and replacing its pension plans and cutting labor costs by an additional $725 million per year, the carrier said it would burn through more than $1 billion in cash each year until it runs out of cash. Elk Grove Village, Illinois-based UAL linked its forecast for a 2005 operating loss to high jet fuel prices, low yields and increased competition from low-cost carriers. United said in October it expected jet fuel costs to be $1.2 billion more in 2004 than projected at the end of 2003. >From 2004 through 2010, United projects a $7.2 billion increase over its prior fuel cost estimations due to price increases. ((Reporting by Kyle Peterson; editing by Matthew Lewis; Reuters Messaging: kyle.peterson.reuters.com@xxxxxxxxxxx; e-mail: kyle.peterson@xxxxxxxxxxx; Tel: +1-312-983-7267)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com)) Roger EWROPS