UAL Corp ( UAL) said it will seek Chapter 11 bankruptcy protection in the fall unless it is able to lower costs dramatically.

"Revenue isn't coming back the way the industry expected. Demand isn't returning, fares remain low, and the industry is grappling with how to respond," the company said. "At United, we have determined that we must make improvements in our business plan to ensure we get the cost savings we need to compete in an industry that has fundamentally changed."

While not saying a filing is definite, the airline noted that it faces $875 million in debt payments due next quarter and that it has "insufficient access to the public capital markets to repay them." The company outlined a plan for deeper cost cuts and said that following discussions with the federal government on much-needed loan guarantees, it has set a 30-day deadline to conclude discussions with "all stakeholders." The company is more than half-owned by its employees.

UAL said it's updating its application with the government to include "significantly broader, deeper and longer-term cost savings."

After closing at $2.45 a share the company's stock was plunging to $1.64 in the Island late session.

UAL, which has lost hundreds of millions of dollars since Sept. 11, is seeking federal government guarantees for $1.8 billion of a $2 billion loan.

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