S&P may cut UAL, United Air

Standard & Poor's said it placed the B- corporate credit ratings on UAL and its United Air Lines subsidiary on CreditWatch with negative implications, due to concerns about cash flow generation and liquidity.

UAL reported a second-quarter 2009 net loss of $323 million before noncash gains on fuel hedges due to much weaker traffic and pricing, which largely offset the benefits of lower fuel prices and good nonfuel cost controls, the agency noted.

The agency said it expects cash to decline the rest of the year due to normal seasonal working capital patterns and to meeting remaining 2009 debt maturities and capital expenditures.

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