Air Transport World

Back to the drawing board for United.(Brief Article)

Rejection of its second loan guarantee application by the US Air Transportation Stabilization Board likely will force United Airlines to seek further concessions from its workforce and suppliers and vendors. But the door seemingly is not closed on a third attempt by the bankrupt carrier to secure a federal guarantee to support exit financing, with two of three ATSB members saying they are open to another review "should United submit an improved application."

UA had been seeking a $1.6 billion guarantee to support $2 billion in financing. In its rejection letter to United Executive VP and CFO Jake Brace, ATSB did not criticize the application per se, but rather stated that "a guaranteed loan to United is not a necessary part of maintaining a safe, efficient and viable commercial aviation system," while claiming that "a majority of the board believes that the likelihood of United succeeding without a loan guarantee is sufficiently high so as to make a loan guarantee unnecessary. …

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