Jake Brace, chief financial officer of UAL Corp., told investors in New York this morning that a number of potential buyers of the airline's maintenance unit have "gone through a very thorough due diligence process and we expect in the very near future will have multiple bids in hand and will take that to the next step."

Once the airline has offers in hand, it plans take the proposals to its unions.

The unions, primarily the Aircraft Mechanics Fraternal Association, "have the ability to block something like this," Brace told a Calyon Securities Inc. conference.

The maintenance unit employs about 5,500 mechanics and handles much of the airline's routine repair work as well as maintenance for about 150 other carriers.

United's union situation potentially got more complicated Monday when the Teamsters International, which opposes a spinoff, said it will seek an election to challenge AMFA for representation of approximately 10,400 active and furloughed mechanics, including about 1,300 in Chicago. The Teamsters say the election could happen in as few as six weeks.

United said earlier this year that it is looking at the possibility of spinning off or selling some non-core businesses, such as maintenance or its frequent-flyer program. Mr. Brace said Tuesday that efforts to sell the frequent-flier program are "not quite as far along."

Meanwhile, United Airlines intends to expand about 15 percent internationally over the next three years but has no interest in increasing its domestic operations.

United already had said it is pulling back domestically, with plans to shrink capacity by 3 percent to 4 percent next year in a U.S. market it considers overcrowded and lacking the money-making potential of overseas routes.

Brace said the airline can carry out its next round of international expansion by reconfiguring or shifting airplanes from its domestic operations. "Beyond that 15 percent, at some point we may want to order a handful of international planes," he said.

By not adding new planes to its fleet, analysts have said it is clear United is banking on a merger at some point. Brace's remarks did nothing to dissuade them.

"We believe that the industry is going to be a lot different five years from now, and we believe that we're well positioned to thrive in that industry," he said. "Our ambition in five years is to be the leading U.S. airline."

Talk that a deal needs to happen soon or risk facing less receptive regulators in Washington under a new administration is just "idle speculation," he said. "Nobody really knows."

United shares rose 2 cents to $39.83 in afternoon trading. They are down about 9 percent in 2007.

(Associated Press contributed to this story.)

Source:  ChicagoBusiness.com