CHICAGO – UAL Corp. (UAL), parent of bankrupt United Airlines (search), has received proposals for up to $3 billion dollars in exit financing, above the $2.5 billion the carrier had requested, the airline's chief executive said Thursday.
Four financial institutions that have seen the business plan United intends to file with a bankruptcy court have determined the company would need an additional $500 million in all-debt financing, Glenn Tilton (search) said in a recorded telephone message to employees.
"These global financial institutions see opportunity in United — even in the midst of the ongoing brutally competitive industry environment," Tilton said.
The No. 2 U.S. carrier, which has been in bankruptcy since December 2002, expects to file its reorganization plan and business plan with the court soon, initiating its emergence from Chapter 11. United has said it aims to exit bankruptcy late this year or early next.
United Thursday reported a net loss of $274 million for July, including $350 million of expenses related to reorganization, and it promised to emerge soon from court protection.
The airline said its July operating profit rose by $62 million from a year earlier, to $113 million, despite a 46 percent increase in jet fuel prices. The carrier said that, excluding reorganization expenses, it would have reported a net profit of $76 million.
United has said that, as it nears an exit from Chapter 11, reorganization expenses will remain high.
UAL ended July with a cash balance of $2.8 billion, which included $923 million in restricted cash.
Earlier Thursday, United flight 881 from Boston to Chicago was diverted to Detroit after crew members smelled smoke in the cockpit.
A United spokesman said the Boeing 757 (search) had 162 passengers aboard and no one was injured. The plane landed normally and technicians were trying to determine what caused the smoke, he said.
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