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United Works On Recovery Plan

United Airlines executives worked Thursday to overhaul the carrier's financial structure, racing against a self-imposed 30-day deadline and promising a severe restructuring to keep the carrier out of bankruptcy.

A day after the airline warned of a possible Chapter 11 bankruptcy filing as soon as this fall, investors awaited the new recovery plan and halted United's dizzying stock descent — at least temporarily.

United is the largest carrier at Denver International Airport, and a bankruptcy filing could have a major impact on the city and Colorado.

Shares in parent company UAL Corp. climbed 25 cents to $2.70 on the New York Stock Exchange after losing more than 80 percent of their value this year and shrinking by more than half this week.

The modest rally came despite numerous Wall Street downgrades of UAL's stock and credit rating that initially sent the price diving to a multi-decade low of $1.90. Adjusted for splits, the stock hasn't closed below $2 a share since 1962, according to the University of Chicago's Center for Research in Security Prices. Less than five years ago it traded at an all-time high of $101.75.

United spokesman Joe Hopkins said the carrier was working to schedule meetings with its unions, suppliers and lessors early next week.

Chief executive Jack Creighton has pledged to come up with "significantly broader, deeper and longer-term cost savings" than the ones already proposed — and rejected by unions. No details have been made available.

It's not clear what kind of reception an even more severe plan, presumably including layoffs along with double-digit pay cuts, could get from unions. Many members blame United management for moves they say have driven down the stock price in recent years; under the employee stock ownership plan, they gave up raises in exchange for stock holdings in 1994 and went years between pay hikes.

Herb Hunter, a spokesman for the Air Line Pilots Association, noted that the United pilots' leadership already has approved a 10 percent pay cut that other employee groups have rejected, representing more than $500 million in savings over three years.

Asked if the pilots would consider even steeper cuts, he said: "We've always been willing to look at what the company wants to present. Our membership will have a voice. ... We understand that times are tough and we're trying to help."

United's 10,000 pilots have the largest stake of any group in the majority employee-owned company, about 28 percent.

The next most-powerful union, the International Association of Machinists and Aerospace Workers, says management can do other things to reduce costs besides slash employees' pay. It says its members have already made a notable concession by agreeing to defer payment of $500 million the company owed them.

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