United Airlines has reached out to capital markets to supply the $500 million dropped from its third government loan request it submitted last week amid a battle over the legitimacy of the application and calls from chief executive Glenn Tilton for more employee concessions.
The airline is now seeking $1.1 billion in government loan guarantees as part of its $2 billion restructuring plan. This is $500 million less than the request rejected by the US Air Transportation Security Administration (ATSB) on 18 June, and $700 million less than its initial request, denied by the ATSB in 2002.
A private investor, however, will probably request further concessions, which could mirror an unidentified $300 million in cost savings, Tilton says. This $300 million, he adds, was not included in the business plan submitted to the ATSB just days before its rejection.
The Treasury's decision to leave the door open to another application after the ATSB rejection has led to a US Treasury Department investigation into the influence of a Congressman from United's home state of Illinois in the decision.
DARREN SHANNON / WASHINGTON DC
Source: Flight International
