The Associated Press

CHICAGO - United Airlines said Thursday that it will take longer than planned to get out of Chapter 11 bankruptcy, telling federal bankruptcy court that it would be premature to emerge by June 30 as intended since several critical issues are still unsettled.

The nation's No. 2 carrier did not cite a new target date but said it expects to be able to exit bankruptcy sometime this summer if it receives a $1.6 billion federal loan guarantee soon and if Congress approves pending legislation granting airlines pension relief.

Despite restructuring efforts that have made it a "stronger and more sustainable company," United said, much work remains to be done and some aspects of the timing are beyond its control.

Airline analyst Ray Neidl of Blaylock and Partners said the delay underscores the importance of United's unresolved issues. "The bottom line is they need to get that unfunded pension liability issue solved before they can get the loan guarantee," he said.

United said when it filed for Chapter 11 in December 2002 - after incurring over two years of big losses - that it expected to spend about 18 months in bankruptcy. It spent 2003 slashing labor costs, negotiating new aircraft leases and obtaining $2 billion in financing from J.P. Morgan Chase and Citigroup, and told the court in January it was on track for a June 30 exit.

But restructuring efforts have stalled.

The Air Transportation Stabilization Board, which rejected United's bid for a federal loan guarantee just before it filed for bankruptcy, has not ruled on its 3-month-old request for a $1.6 billion guarantee. The exit financing that United obtained hinges on the loan guarantee being approved.

United also is in urgent need of pension relief before it can emerge and is hoping for congressional passage within the next month of a bill that would effectively grant airlines a two-year delay in pension payments. Under current law, United parent UAL Corp. faces $4.8 billion in required payments to its pension plan trusts by the end of 2008.