United Air Lines, Inc.

Client

United Airlines (“UAL”) was the second largest US-based carrier in the world, with approximately $15 billion in annual revenue and approximately 63,000 employees. UAL filed for bankruptcy in the Northern District of Illinois on December 9, 2002.

Challenge

During the fall of 2004, two of UAL’s unions – the International Association of Machinists (“IAM”) and the Association of Flight Attendants (“AFA”) filed a motion to appoint a Chapter 11 Trustee to replace existing management. To resolve the matter, the unions and the Company agreed to retain a third party to provide (a) an independent assessment of the feasibility of the Debtor’s business plan and (b) to evaluate the Debtor’s requirement that it eliminate in excess of $7 billion in pension and medical benefits to be able to emerge from bankruptcy. Bridge was allowed 30 days to complete its evaluation.

Solution

Bridge assembled a senior team of professionals with airline industry experience, valuation, turnaround and operations experience and pension related experience. The team reviewed the Debtor’s business plan, strategic plan, the operating and financial plans created by each of the Debtor’s major business areas: flight network optimization, labor, finance and revenue management, maintenance, corporate real estate, airport operations, capital expenditures and regional air partner operations. In addition, Bridge professionals met with executives and staff from each of the groups responsible for putting together the components of the business plan, members of the “C” suite, outside professional advisors and representatives of the Debtor’s lenders and capital providers.

Results

Bridge delivered a comprehensive report on the feasibility of UAL’s business plan validating to the Debtor and the unions both its feasibility and the necessity for making deep cuts to the Debtor’s pensions and medical benefits. As a result of this report the Debtor was able to resolve critical differences with its labor constituency and emerge from bankruptcy as a reorganized company.