The world's number two airline decided to review the account out of Zenith Media in November, ostensibly to find an agency closer to its Chicago headquarters. Publicis Groupe-owned Starcom MediaVest was tipped to be in line for the work.
The airline is doing its best to assure customers that it is business as usual, that all air tickets will be honoured and that customer loyalty programmes are still operating.
The airline reduced media expenditure to $57.3m (£36.3m) last year from $78.4m in 2000, according to figures from Taylor Nelson Sofres CMR. At the beginning of 2001, United moved its creative account from Young & Rubicam Advertising to the Minneapolis-based agency Fallon, also part of Publicis Groupe.
The lastest ads by Fallon to screen in the UK focused on the boredom of business travel and promoted United's extensive network of destinations.
Fallon and other agencies working for United could face similar problems to others hit by client bankruptcy. Havas, the French advertising group, blamed the troubles of its client WorldCom for a decline in profits over the third quarter of the year. It said it had been badly hit, with a 1% fall in revenues, by WorldCom's advertising freeze after it went into Chapter 11 bankruptcy protection and faced an investigation over major accounting irregularities.
Chapter 11 permits a company to continue operations in the normal course of business, while it restructures to cope with debt.
United blames its financial problems on the effects of September 11, the downturn in the economy and the fact it faced $875m in debt maturities this year.
In a statement today, Glenn Tilton, chairman, president and chief executive officer of United Airlines, said: "We have begun the hard work of transforming our airline, and over the last several months have made progress in responding more effectively to changes in the marketplace and reducing the size of our airline to match demand.
"However, at this stage, reorganisation through Chapter 11 offers the best way to provide uninterrupted service to our customers around the world, safeguard the value of our businesses and assets, and, ultimately, emerge as a stronger healthier and more competitive airline."
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