UAL Files For Federal Loan Guarantee

Just days before Friday's deadline, United Airlines today announced it has filed an application with the Air Transportation Stabilization Board for $1.8 billion worth in loan guarantees, covering most of the carrier's total $2 billion loan request.

Calling United "the perfect candidate for the ATSB program," CEO Jack Creighton said, "We're now burdened by short-term financing needs that are driven by the aftermath of Sept. 11 and aggravated by the weak economic recovery. While we continue to explore financing alternatives, we don't believe they will be sufficient because our access to the capital markets has been severely restricted."

United had been holding back from applying to ATSB, opting instead to first negotiate labor concessions. Though the carrier last week reached a tentative plan with the pilots union, neither the mechanics nor flight attendants union has agreed to cost-cutting measures. In fact, the Association of Flight Attendants on Friday stated it would not discuss concessions under current circumstances.

United follows US Airways and America West Airlines in applying to ATSB for federal loan guarantees. AWA's application was approved in late December, while US Airways' request still is being considered by ATSB staff. US Airways' business plan calls for a domestic and/or international alliance partner. One such partner may be United; the two carriers last week confirmed codeshare talks were underway.