Judge Eugene Wedoff said the airline’s monthly status report, filed Thursday, indicated that the company is making strides toward improving communication with unions and others.
Before Friday’s hearing, United struck a deal for another month of exclusivity with all but one party that had been asking the court to revoke it.
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Wedoff now plans to hear the matter on Oct. 15, the same day he considers a motion by the machinists union to appoint a trustee to guide United out of bankruptcy.
The flight attendants union has joined that motion and was the only party that did not want United’s management to maintain exclusivity for another month.
United’s pilots union, which supported the one-month extension, nevertheless issued a scathing indictment of the airline’s management Friday.
“It must be said that the United pilots are growing increasingly concerned that the company’s current management team may not be able to craft a bankruptcy exit that preserves a strong, profitable enterprise,” the union said in a statement.
“We will need the answer to this question during the next several weeks or we will be compelled to explore other solutions,” the union said.
Douglas Baird, a bankruptcy professor at the University of Chicago Law School, said United might lose its exclusivity but “we’re a million miles away from having a trustee appointed in a case like this.”
United’s unions are not big enough creditors to persuade a judge to appoint a trustee, he said.
The unsecured creditors committee or the firms financing United’s bankruptcy would have to request a trustee for the move to be taken seriously, he said.
Still, Baird said, United’s disclosure Thursday that it needs $500 million in cost cuts atop more than $600 million in cuts it identified two weeks ago is not startling.
But, he added, “having bad nine-digit news month after month is not something that makes you feel particularly confident about a successful reorganization.”
That makes United’s loss of exclusivity more likely in coming months, although experts say such a loss rarely puts a company’s management in jeopardy.
“It just means other people can propose a business plan,” Baird said. “It doesn’t mean the company will be reorganized according to that plan.”
Chief Financial Officer Jake Brace said after the court hearing Friday that United told all its “stakeholders,” including unions, a month ago that it could be forced to cut another $500 million.
United’s unions have not publicly disputed that, but some have said that the company’s communication with them has not improved since the judge warned United last month to repair those relationships.
“We don’t have the critical information necessary to understand United’s latest cost-cutting goal,” Joseph Tiberi, spokesman for the International Association of Machinists and Aerospace Workers, said Friday.