United filed for protection from creditors in December 2002

The nation's second biggest airline has shed a quarter of its workforce and made $7bn(�3.9bn) cost cuts to compete with low-cost and slimmed-down rivals.

The airline has been restructuring for three years after failing in late 2002.

Creditors and trade unions have been critical of a controversial equity compensation package for top managers.

'Feeling of relief'

However the airline received the Chicago court's approval for a proposal to grant an estimated $115m in equity to some executives.

Unions say the deal is extravagant after workers had to face two rounds of wage and benefit cuts.

But the airline says linking management compensation to the airline's stock performance ensures competent leadership and that bosses will not be tempted to look elsewhere for work.

Judge Eugene Wedoff signed off the business plan, saying: "If there's not a feeling of exaltation in this room perhaps there can be a feeling of relief."

Pension cutback

United is the second-largest US carrier after American.

Its rivals Delta and Northwest both operate under bankruptcy protection, while US Airways emerged from this status in September last year.

A year ago pilots and flight attendants at United agreed to accept pay cuts worth $310m a year to help the carrier bounce back from Chapter 11 bankruptcy protection.

In May 2005, the airline reported a doubling in first-quarter losses to $1.1bn, compared with a $459m loss in the previous year.

But in the same month a US court granted United permission to end its pension funds, saving United $645m a year in what was to become America's largest corporate pension default.