UAL Bailout Rejected

[Please Hire Me]

http://www.foxnews.com/story/0,2933,72166,00.html
Bad news for the UAL guys.



Government Rejects United Airlines Bid for Loan Guarantee

Wednesday, December 04, 2002

WASHINGTON — The federal government on Wednesday rejected an application by United Airlines for a $1.8 billion loan guarantee the company said was crucial for avoiding bankruptcy.

The Air Transportation Stabilization Board, set up to help airlines struggling financially after the Sept. 11, 2001, attacks, voted 2 to 1 to not accept United's loan guarantee bid.

The decision came one day before mechanics at the No. 2 airline were to vote again on concessions that are part of a $5.2 billion give-back package the airline has negotiated with its unions.

United, a unit of UAL Corp. (UAL), had counted on the loan guarantee to support 90 percent of $2 billion in private financing it hoped to get from its banks. The company planned to use that money to repay debt and help fund operations, while it overhauled its operations outside bankruptcy court.

UAL shares closed up 7 cents, or 2.3 percent, to $3.12 on the New York Stock Exchange.

 

[MINIME]

Guess crap's gonna hit the fan now!!
Anyone know what this could do to the regionals that codeshare with UAL?

 

[VFR on Top]

I'd guess nothing, since they're still making money there. Honestly, I didn't expect this guarantee to come through, thanks to the Bush Administration's anti-labor bent. Why? Bankruptcy is the greatest contract-voiding, union-busting tool in the toolbox. Just you watch.