UAL Positive Cash Flow Beat Forecast -CFO
Wednesday March 12, 3:26 pm ET


CHICAGO (Reuters) - UAL Corp. (NYSE:UAL - News) Chief Financial Officer Jake Brace said on Wednesday that wage concessions from labor unions helped bankrupt United Airlines turn in positive cash flow for the month of January, beating its own forecast.

The company's January cash flow was a positive $1 million per day compared with its expectations of a negative cash burn rate of $10 million to $15 million per day, Brace said at a meeting of creditors in Chicago.

Brace also said UAL expected to exceed its first target for EBITDAR, or earnings before interest, taxes, depreciation, amortization and rent. The
target was set up by the lenders of its debtor-in-possession financing.

He attributed the phenomenon in part to interim wage reductions from labor groups that the company secured earlier than expected. Most of UAL's labor unions agreed to temporary pay cuts while they work out long-term deals, and a judge imposed the wage cuts on the holdout machinists union.

UAL filed the largest bankruptcy in aviation history on Dec. 9. The airline also said on Wednesday it had a higher cash balance after its bankruptcy filing than it expected, in part due to fewer passengers booking on other airlines than originally forecast.