UAL Snubbed, Bankruptcy Likely

Shares in UAL Corp., parent company of United Airlines, lost 67 percent of their value and closed at $1.02 a day after the Air Transportation Stabilization Board voted to reject the airline's application for a $1.8 billion loan guarantee. Many analysts said bankruptcy proceedings are imminent. A few industry sources suggested United could file for Chapter 11 as early as this weekend.

United's union mechanics yesterday promptly canceled a vote, scheduled for today, to consider wage cuts as part of the loan proposal. Machinists union president Tom Buffenbarger called the ATSB decision "irresponsible" and said "a vote on the current recovery package would be pointless."

ATSB executive director Daniel Montgomery told reporters United still could file a revised request for aid even if the airline files for bankruptcy. "We appreciate, however, the possibility expressed to consider an improved proposal at a later date," said United CEO Glenn Tilton in a statement yesterday. Tilton in the same statement said the airline will continue service.

Some of United's largest corporate clients today told BTN they expect business as usual and will continue to support the carrier unless service degrades significantly.