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BUSINESS BRIEFING / AIRLINES

United reworks credit agreement

November 26, 2008|Times Wire Reports

United Airlines, which has had to put up hundreds of million of dollars in new collateral on fuel hedges as oil prices have fallen, said it had reworked a credit card agreement to reduce penalties if its cash balance fell.

Based on Tuesday's oil price below $51 a barrel, UAL Corp.'s United would have to put up some $990 million in collateral, according to a formula for its fuel hedges. By comparison, as of Sept. 30, it had $378 million in cash deposits held by people on the other side of its bet that fuel prices would keep rising.

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