By Dave Carpenter
The Associated Press

CHICAGO - United Airlines pledged itself to an "agonizing" reorganization Monday as it surrendered to unpayable debts and billion-dollar losses, seeking shelter in the biggest airline bankruptcy filing ever.

Hoping to prevent passengers from defecting to rivals, CEO Glenn Tilton promised United would keep flying as usual and said the Chapter 11 filing provides the world's No. 2 carrier a chance to remake itself.

United has five roundtrip flights daily between Chicago and Cincinnati.

United's filing, the sixth largest by any company, came less than a week after the federal government rejected a plea for financial assistance and amid the industry's worst downturn.

The bleak numbers in its petition, filed before dawn in U.S. Bankruptcy Court in Chicago, underscored what the company portrayed as an urgent need to slash costs, including wages. The company said it has been losing $20 million to $22 million a day in recent weeks, much worse than previously reported.

United did not specify the cuts to be made in a bankruptcy that Mr. Tilton expects to last about 18 months, but they are certain to include reducing the number of flights, dropping unprofitable routes and slashing wages.

United operates about 1,700 flights a day, or about 20 percent of all U.S. flights. It has the most extensive worldwide route structure of any airline, but also the industry's highest costs.

Asked what routes might be eliminated, Mr. Tilton replied: "We're going to rigorously stress-test every single route against what we perceive to be the future market. ... If I can't see United being competitive in that market even with a significantly better cost structure, it goes."

It's possible that United's rivals, including Delta Air Lines, could pick up routes and markets.

United, based in suburban Chicago, has lost $4 billion in the past two years. It said in its filing that the impact of low-cost carriers has been "particularly severe." Passenger revenues plunged from $16.9 billion in 2000 to a projected $11.8 billion for 2002.

United listed assets of $22.8 billion and liabilities of $21.2 billion in its filing Monday. In its latest annual report, it listed almost $25.2 billion in assets - more than twice the value of the assets held by Continental Airlines in its last annual report before filing for bankruptcy in 1990.

It said it obtained $1.5 billion in financing from several banks to continue operating in bankruptcy and had $800 million cash on hand - not enough to pay off $875 million in debt that came due this week.

The filing will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts, and could dissolve the employee stock ownership plan.

The leaders of United's unions said both sides must work together during restructuring.

"Despite the difficulties that brought us to this point, we must now come together and focus our efforts on the survival of United Airlines, and ensuring that this bankruptcy does not lead to liquidation, as United's competitors wish," Machinists' union presidents Randy Canale and Scotty Ford said in a communique to their members.

Despite analysts' expectations that United's stock would become worthless, investors appeared to be speculating. Shares of UAL, which reached $100 in 1997, closed unchanged at 93 cents Monday on the New York Stock Exchange, with more than 57 million shares traded.