Ruling May End Employee Control of United Airlines
A ruling from the Internal Revenue Service yesterday could end control of United Airlines by its employees after nearly a decade, according to United and its parent, UAL Corp.</br></br>Separately, the airline reported in a filing with the Securities and Exchange Commission that it lost $382 million in January. The airline also said it had $1.18 billion in operating revenue and $1.51 billion in operating expenses.</br></br>United said the IRS ruled that the trustee for its employee stock ownership plan may sell an additional 3.9 million shares on employees' behalf. If the trustee -- State Street Bank -- sells the shares, employee ownership of the airline could fall below 20 percent, ending the ESOP. United said the change in ownership could occur within the next few weeks.</br></br>If employees lose their controlling interest, board representatives of United's pilots and machinists unions would lose their influential voting rights on acquisitions, appointments of chief executives and divestitures.</br></br>The IRS ruled that State Street could sell the additional shares without jeopardizing substantial tax benefits, called net operating loss carryforwards, that United feared would be lost if its ownership changed.