United Airlines has said it may file for bankruptcy this autumn if it cannot dramatically cut costs.
It is the airline's first such admission since losing record amounts of money after the September 11th attacks.
The second largest US carrier said in a regulatory filing it plans to refile an application with the Air Transportation Stabilisation Board for $1.8 billion in federal loan guarantees, which will include a new business model.
But the carrier said there can be no assurances it will win such backing for private sector loans, even if it does reach cost-cutting deals with various groups.
The airline has given itself 30 days to cut the deals. So far, only pilots and salaried and management workers have agreed to pay cuts.
Shares of United Airlines parent UAL, pummeled all year, plunged further yesterday to $1.87 on Instinet after the announcement. The shares had closed at $2.45 on the New York Stock Exchange. In October 1997, when the US economy was booming, the shares traded at more than $100.
On Sunday, US Airways filed for Chapter 11 bankruptcy protection as a historic downturn in US aviation continues.