United urged to file for Chapter 11

Leo Lewis
Sunday 19 January 2014 02:56

Rosenbluth International, United Airlines' biggest corporate customer, is strongly urging the embattled US carrier to file for immediate Chapter 11 bankruptcy protection, which it may do within the next few days.

The advice comes amid a deepening crisis in the US airline market that threatens to cripple domestic travel within North America.

Speaking exclusively to The Independent on Sunday, Hal Rosenbluth, the chief executive of one of the world's biggest corporate travel agencies, revealed he had approached the chief executive and board of United Airlines to tell them that their business survival depended on seeking bankruptcy protection.

"I told them very clearly that they should file Chapter 11 within the next few days," said Mr Rosenbluth. "They did not disagree with me."

Mr Rosenbluth, a travel industry veteran of nearly 30 years, believes that only by declaring bankruptcy can United recover its customer base. "A pending bankruptcy is so much worse for customers," he said. "Once it's out in the open, the bookings start coming back."

United may be forced to follow US Airways' lead in filing for Chapter 11 earlier this month, if it wants to strike the sort of deal now being proposed by the industry.

In a desperate effort to control costs and guarantee continued domestic US services, Delta, Northwest and Continental last week agreed on a scheme that would let them sell tickets on each other's flights, giving the industry better pricing power.

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