KAREN WALKER / WASHINGTON DC
United Airlines' bankruptcy filing has spotlighted the US Air Transportation Stabilization Board (ATSB), which denied the carrier's application for a $1.8 billion federal loan guarantee, a key factor in forcing a Chapter 11 decision. United's unions blame the ATSB for the bankruptcy, with Air Line Pilots Association (ALPA) president Duane Woerth accusing it of "destabilising" the industry.
But other US major carriers say the ATSB made the right decision and industry analysts credit the board with making "stringent but fair" decisions across all loan guarantee applications. The board has approved only a fraction of the $10 billion loan guarantee funds available to it. The main winners were ATA, America West, Frontier and US Airways, totalling about $1.5 billion. US Airways' $900 million guarantee remains conditional on cost cuts. Among the several small carriers that applied and were rejected are National and Vanguard, which have both slid into bankruptcy.
The ATSB was set up by Congress after the 11 September terrorist attacks and was given authority to approve government loan guarantees to airlines that found themselves in dire financial need because of the impact of the attacks.
Three key criteria must be met for a successful application: that the airline is essential to the US national aviation transportation system; that it has no access to the commercial market for loans without a government guarantee; and that the loan will be paid back.
Delta Air Lines chief executive Leo Mullin says the ATSB has made "proper decisions" within those rules.
Source: Flight International
