United Airlines, reeling from two years of heavy losses and unable to pay off nearly $1 billion in debt due this week, filed for federal bankruptcy court protection Monday. It was the largest such filing in aviation history.
The Chapter 11 filing also was one of the 10 biggest ever among any corporation. The suburban Chicago-based company has lost $4 billion in the last two years due to a slumping economy, flawed business strategies and the Sept. 11 terrorist attacks.
The airline has promised to keep flying while it sheds costs under the auspices of a bankruptcy court judge and overhauls its business plan to try to become profitable again.
United operates about 1,700 flights a day, or about 20 percent of all U.S. flights. It has the most extensive worldwide route structure of any airline.
While the bankruptcy filing likely will have no immediate effect on passengers, it will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee stock ownership plan.