But Will The Feds Go Along This Time?

UAL, parent company to United Airlines, says it now has the $2 billion it needs to exit bankruptcy. The airline reported Wednesday that it had secured the financing from JP Morgan and Citigroup.

But there are conditions. Both financial groups want $1.6 billion in loan guarantees from the federal government's Air Transportation Stabilization Board.

That may be a tricky proposition.

The board is supposed to pass out $10 billion in loan guarantees to an airline industry crushed by the 9/11 terror attacks. But a year ago, it rejected United's loan request, saying the company's projections were not only incomplete, they were unfounded. A week later, United was in federal bankruptcy court.

But things have changed over the past year. What UAL had sensed was in the wind last December has indeed come to pass. And lenders say the airline itself has changed. Bill Repko, managing director of JP Morgan's restructuring unit, said, "United has done all the right things to position itself for a successful exit."

Under the plan, both JP Morgan and Citibank would contribute $800 million in government-backed loans. In addition, they'd each put up $200 million in "at-risk" money.

"The competitive terms of this financing package -- especially the willingness of both banks to include a substantial amount of at-risk funding -- reflect the extraordinary progress United has made this past year and the credibility of our plan for the future," said UAL CEO Glenn Tilton.

If all goes as planned, United plans to emerge from bankruptcy around the middle of next year.

FMI: www.ual.com