United Airlines (search), needing to cut its operating costs even more to survive, on Monday said it may seek to renegotiate aircraft financing deals made since entering bankruptcy to lower payments.

If the financing arrangements cannot be renegotiated, United said lessors or other financiers may choose to repossess the planes, which is their right under bankruptcy law.

United, a unit of UAL Corp. (search), said because the government recently rejected its application for backing of a reduced $1.1 billion loan, the additional cost-cutting needed to attract private financing will include reworking the aircraft financing agreements.

Other parts of United's business are also under review, including heavily underfunded pension plans.

United must now arrange nongovernmental guaranteed exit financing to get out of Chapter 11 protection, which it sought in December 2002. In a regulatory filing, it said if a significant number of aircraft were repossessed, financial and operational performance could be hurt.

United also said in its 10-Q report that in the wake of the government loan guarantee rejection, Chief Executive Glenn Tilton (search) has decided voluntarily to reduce his salary to $712,500 from the $845,500 he had been receiving since April.

Tilton has cut his pay several times since becoming CEO at United in the fall of 2002 at an original $950,000.

The aircraft lease rates have been some of the most complicated discussions under what is known as Section 1110 of the U.S. bankruptcy code. That provision gives the aircraft lessor rights to repossess planes after 60 days from the initial filing, a time now long passed in United's case.

In practice, lessors have little incentive to actually take back planes as finding airlines to fly and pay for them is difficult in the ongoing aviation downturn.

United has rejected the leases on a number of older aircraft during bankruptcy and has been able to cut its payments sharply on others as the value of aircraft in general has dropped since the Sept. 11 attacks.

UAL shares, which are expected to be worthless upon exit from bankruptcy, were down 1-1/2 cents at $1.27-1/2 in over-the-counter trading on Monday afternoon.

The airline also urged that "caution be exercised with respect to any existing and future investments in any UAL equity security ... at this time, it is not possible to predict accurately the effect of the Chapter 11 reorganization process on our business, nor can we make any predictions concerning how certain claims will be valued."