A1FlyBoy
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CHICAGO –– United Airlines asked the government Monday for $1.8 billion in loan assistance, making it the biggest carrier yet to seek help from a loan guarantee program created to prop up the ailing industry after Sept. 11.
The nation's No. 2 airline, which has lost about $1 billion since the attacks, is the third major carrier to seek federal guarantees, following America West and US Airways.
Elk Grove Village, Ill.-based United said it would ask the Air Transportation Stabilization Board to back 90 percent of a $2 billion loan.
Chairman and chief executive officer Jack Creighton called United "the perfect candidate" for the program, since it was a target of the attacks.
"We're now burdened by short-term financing needs that are driven by the aftermath of Sept. 11th and aggravated by the weak economic recovery," Creighton said. "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."
Creighton had said United would apply if it got wage concessions from its workers. It has since ordered pay cuts for its 11,000 management and salaried employees, estimated at $430 million over three years, and reached a tentative pay-cut agreement with its 9,200 pilots worth another $520 million over three years.
Federal approval of its application is not assured.
Not only have its mechanics and flight attendants not agreed to cuts, United has come under fire within the industry for seeking government funds despite the fact it was in trouble before Sept. 11.
Shares in United's parent company, UAL Corp., fell 44 cents to $11.51 in afternoon trading on the New York Stock Exchange.
The nation's No. 2 airline, which has lost about $1 billion since the attacks, is the third major carrier to seek federal guarantees, following America West and US Airways.
Elk Grove Village, Ill.-based United said it would ask the Air Transportation Stabilization Board to back 90 percent of a $2 billion loan.
Chairman and chief executive officer Jack Creighton called United "the perfect candidate" for the program, since it was a target of the attacks.
"We're now burdened by short-term financing needs that are driven by the aftermath of Sept. 11th and aggravated by the weak economic recovery," Creighton said. "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."
Creighton had said United would apply if it got wage concessions from its workers. It has since ordered pay cuts for its 11,000 management and salaried employees, estimated at $430 million over three years, and reached a tentative pay-cut agreement with its 9,200 pilots worth another $520 million over three years.
Federal approval of its application is not assured.
Not only have its mechanics and flight attendants not agreed to cuts, United has come under fire within the industry for seeking government funds despite the fact it was in trouble before Sept. 11.
Shares in United's parent company, UAL Corp., fell 44 cents to $11.51 in afternoon trading on the New York Stock Exchange.