This Friday, United Airlines’ parent UAL Corp. announced that it will pay shareholders $250 million. The company will pay $2.15 per share in a special distribution. This move was approved by the company lenders. The distribution will occur in January 2008.
United Airlines will also reimburse $500 million of the term loan under its existing credit agreement.
These initiatives come after a 14 percent drop for the stock since late October and at the investors’ pressure for the carriers to raise their stock value. UAL Chief Executive Officer, Glenn Tilton stated that the aim is to build a successful and sustainable company which provides return on investment for its shareholders. He added that “this shareholder distribution underscores our commitment to creating value for our investors.”
In another statement the company declared that it is able to undertake an additional $250 million in shareholder initiatives and can carry out other such initiatives.
As United’s labor unions have criticized last week the carrier for rewarding shareholders while ignoring employees, the company stated that by paying down debt benefits employees who also receive 15 percent of its profit. United’s labor unions have made major concessions in pay and benefits to help the airline through bankruptcy and last week expressed that any gain from credit restructuring should be shared with employees also.