United Airlines parent UAL saw the value of its shares drop by almost one-sixth during the two days of trading after it emerged from bankruptcy protection, as two other US carriers prepare to emerge from Chapter 11 this month.

UAL left Chapter 11 protection on 1 February following the approval of its 9 December reorganisation plan by the US bankruptcy court. Shares in UAL Corp New, the restructured company, began trading on 2 February and fell from $41 to $35.89 in the first day before slipping a little further on Friday, when it closed at $34.60. However, the 15.5% drop represents a smaller drop than many analysts had predicted and the company hopes this signifies relative market confidence in the new company.

United, now headed by former oil giant ChevronTexaco vice chairman Glenn Tilton, has implemented an efficiency drive that has made annual cost savings of around $7 billion and eliminated $13 of debt. The carrier has also shed tens of unprofitable routes and upgraded its fleet while increasing its targeted marketing, it says.

"Today, we have the business platform we need to compete with the strongest carriers and a clear strategy of offering the right service to the right customer at the right price," says Tilton. United exited bankruptcy protection with $3 billion in cash, of which $2.8 billion is a loan and $200 million is a revolving credit line.

Meanwhile, the court has also approved the restructuring plans of Aloha, albeit with modifications; and the initial plans by ATA Holdings, which would see both carriers emerging from Chapter 11 this month.

Hawaiian carrier Aloha, which entered Chapter 11 on 30 December 2004, sees itself coming out of protection with $63 million in equity and very little debt.

ATA, which filed for protection in October 2004, has recently finalised repayment terms on its loan from the US Air Transportation Stabilisation Board (ATSB), clearing the way for its return from protection.

US majors Delta Air Lines and Northwest Airlines are still negotiating their paths out of Chapter 11 and are expected to do so in the first half of this year.

Source: Flight International