DALLAS -- United Airlines probably will not sign a final agreement to use the Denver International Airport until next year, a delay that is expected to increase pressure to keep the project on target.

Denver and the Chicago-based carrier had originally agreed to negotiate a final lease agreement by Nov. 30, but a city official said a final pact will probably have to wait until rival Continental Airlines decides its future role at the $3.1 billion airport.

"We haven't agreed to a delay" in negotiations, said George Doughty, Denver's aviation director. "We're discussing the possibility of a mutually agreed-to delay."

Wall Street analysts say they expected negotiations to be extended until at least Feb. 7, but some warn that protracted negotiations could put the project off budget and behind schedule.

"It's going to increase the pressure on them to delay [construction plans] or to keep the project on track, both of which have negative aspects," said Todd Whitestone, managing director at Standard & Poor's Corp., which rates the project BBB-minus. "I would hate to see them lose any of the flexibility that they have."

A key factor in the delay is Continental's bankruptcy status.

Continental had been expected to file a reorganization plan by Nov. 28, but it has pushed that deadline to February.

Until Continental decides what its future role will be at the new airport when it opens in late 1993, analysts say United is not likely to finalize its own lease terms.

"That's what everybody was expecting," said Andrea Bozzo, a senior vice president at Fitch Investors Service, which rates the project BBB. "They have already agreed in concept. The fact that they haven't signed on the dotted line yet isn't a concern. It's only a matter of timing."

City to Decide on Contracts

Adam Whiteman, assistant vice president at Moody's Investors Service, which gives the project a conditional Baal, said that because the decision to delay the final negotiations was mutual he is not concerned, and "right now, it doesn't impact the rating."

The city is scheduled to decide in January whether to delay or proceed with $309 million in contract work.

That work includes $182 million of support facilities construction and a $127 million baggage handling system. Mr. Doughty said the baggage system may be built, even if a final agreement with United still has not been reached, if the airline provides assurances that it will use the system.

"We will not allow this to affect the schedule," he said.

United officials declined to comment about negotiations, except to say that a final agreement might be delayed until early 1992.

Denver is scheduled to sell $300 million of airport revenue bonds in January. kenneth Gibbs, senior vice president at Lazard Freres & Co., the project's financial adviser, said many factors will determine when the next financing will be completed.

Denver has already sold $2.1 billion of long-term debt for the project.

Standard & Poor's says further delays could only strengthen United's position in negotiating a lease.

In an overview of the project published today in CreditWeek Municipal, Mr. Whitestone says the best thing for Denver would be for Continental to reaffirm its commitment to the city. He says that would likely prompt United to sign an agreement and keep the project on schedule.

However, he added, "If Continental fails to emerge as the same force it has been in the Denver market, the city's relationship with United will become even more important. An unsigned use and lease agreement would give United the opportunity to extract more concession from the city."

Denver officials disagree.

"I think the opposite is true," Mr. Doughty said in an interview. "I think that every ounce of concrete that is put into the airport strengthens our position and weakens United."

A Critical Period

Noting that Stapleton International Airport must close when the new airport opens, Mr. Doughty said it is critical for United to reach an early agreement that will allow the airline to have customized facilities.

"A use and lease agreement is of little value to us. It's of a great deal of use to United," he said.

But in an article titled "Denver Airport Rating on the Line," Mr. Whitestone says the next six to nine months will be a critical period for resolving the issue of airline support for the project. The agency has placed its rating on developing status.

He writes that despite many good reasons to replace Stapleton, the new project "has been handicapped both by the large debt required to finance it and a critical lack of airline support."

For instance, because the city and United have a history of acrimony, Mr. Whitestone said the rating agency is awaiting absolute proof that United is committed to the project. What will it take? His answer: "S&P is now waiting for an irrevocable signature on a use and lease agreement for" the Denver airport.

The remarks are consistent with past reports from Standard & Poor's, which is regarded as the most conservative agency in its view of the Denver project.

In its latest report, the rating agency urges a slower approach to developing the project and questions projections that the airport could have 17 million passengers by 1995 even if both United and Continental continue to account for 78% of all traffic in Denver.

Mr. Whitestone said he is confident that local demand for air travel will remain strong, but questions forecasts of growth in connecting passenger traffic.

The city's feasibility consultant, KMPG Peat Marwick in San Francisco, estimates a 4% annual growth in connecting-passenger traffic and an additional 11.2% increase in 1994 when the new airport opens.

While Standard & Poor's does not offer its own projections, it does say such a shortfall would affect the finances of the airport.

"Because this facility is being constructed in large measure for connecting purposes, S&P remains concerned that the two main carriers will not or cannot fully support the project," he wrote. "As a result, Denver's decision to proceed rapidly is riskier."

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