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Though still in red, United Airlines aims to exit 3-year bankruptcy Feb. 1

CHICAGO -- United Airlines intends to emerge from bankruptcy in February as a much more financially sound carrier than the one that has been restructuring under court protection since 2002, parent UAL Corp. said yesterday in filing its long-delayed reorganization plan.

The airline now faces months of hearings at which investor groups are expected to jockey for its limited assets.

Chief executive Glenn Tilton pronounced the restructuring successful and declared ''the countdown has begun" toward a Feb. 1 exit from Chapter 11 bankruptcy.

Still awaited is United's return to the black after nearly $3 billion in net losses in 2005 and over $10 billion in the last five years.

The company projected operating income of $916 million in 2006 and an overall net profit based on a forecast of 4 percent higher revenue, and said income and revenue should rise steadily through 2010. But those projections assume oil prices average $50 a barrel -- far lower than yesterday's price of $64.37.

The filing in US Bankruptcy Court mostly outlines the company's proposals for repaying creditors and recounts its restructuring moves, omitting any detailed discussion about management's vision for United's future or its long-term operating strategy.

''They're going to continue the business they have now and hope that it makes money on an ongoing basis," said Douglas Baird, a bankruptcy professor at the University of Chicago Law School. ''They're concentrating more on international routes, they've restructured their domestic operations, and now they're going to cross their fingers."

United's stay in bankruptcy is now ensured to take more than three years -- complicated by soaring fuel prices, the difficulties in obtaining two rounds of labor cuts, and the failure to secure a federal loan guarantee.

But the number two US carrier is hopeful that its return to a positive cash flow in recent months signals a turnaround is finally under way. The extensive restructuring measures -- $7 billion in yearly cost reductions from renegotiated airplane leases, new labor contracts, 20,000 job cuts, the elimination of pension obligations -- have given it a financial edge over other large network carriers.

''We are a vastly different airline than we were in 2002," chief financial officer Jake Brace said.

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