United Airlines' business plan for exiting bankruptcy is feasible but not a sure thing even if the airline achieves its cost cutting goals, an independent analysis of the company's strategy showed on Monday.

An executive summary of the confidential six week review by Bridge Associates found, after reviewing internal company and other documents and proposed cost cuts, that the airline's plan for stepping out of court protection next year is doable under certain conditions.

United says it has begun shopping its updated business plan to its potential lenders.

But the analysis cautioned that a combination of risks, including failure by the carrier to obtain USD$725 million in new union and non-union cost cuts by mid-January, could hurt the airline's chances of executing its strategy.

United adopted the Bridge review after pressure from unions, specifically the International Association of Machinists and the Association of Flight Attendants.

Jean Medina, a UAL spokeswoman, said the report validated the company's business plan. But the flight attendants noted the plan was vulnerable.

"The report speaks to more than labor cost savings and states that every area of the plan's cost savings and revenue enhancements are subject to external and execution risks," said AFA spokeswoman Sara Nelson Dela Cruz.

The report noted that any spike in fuel prices or higher interest rates could adversely impact United's current plan for all-debt exit financing even if its cost cuts were in place.

"Lending institutions may be unable to attract sufficient participants to complete such a financing and permit the company to emerge from Chapter 11 by mid-2005," the analysis showed.

No details of the company's revamped business plan were provided in the summary briefly outlined by the airline in bankruptcy court on Friday.

The airline has said it plans to shrink its mainline fleet, boost capacity on international service and shift some domestic flying onto its express partners.

United has been in bankruptcy for two years. The entire industry has been buffeted by soaring fuel costs and soft revenue.

The biggest airlines, including United, have also faced stiff competition from low-cost rivals.

(Reuters)