Bankrupt Airline's CEO Says Taxpayers Risk Nothing

We want it. We need it. We're entitled to it.

That's the line from United Airlines CEO Glenn Tilton these days, as he angrily defends his bankrupt airline and demands that the government grant it $1.6 billion in loan guarantees.

A three-member federal board is deciding whether to grant United the guarantees, which Tilton says are crucial to the airline's emergence from its 2002 bankruptcy. A decision could come before next month.

Tilton says it's "inarguable," telling USA Today that there's no question United is entitled to the guarantees.

He says, even if United were to default on the loans, the taxpayers' money isn't at risk. Tilton says United's sellable assets are worth up to three times the $1.6 billion requested.

But the request has encountered severe turbulence. Even though United lost two aircraft in the September 11th attacks, the federal loan board, comprised of representatives from the Treasury Department and the Federal Reserve, turned down its application for the guarantees in December, 2002.

The board decided United's projections were too optimistic, its cost structure too high and its sales too vulnerable to competition from low-cost carriers. Days afterwards, United went Chapter 11.

Tilton says he's angry at lobbyists fighting against the loan guarantees. They include competing airlines, which say the guarantees would give United an unfair advantage. They also include watchdogs like Citizens Against Government Waste, which recently wrote the board urging it to vote "no."

Even though United posted a $459 million loss for the first quarter of 2004 last week, Tilton remains outwardly optimistic.

"We've done the work and met the criteria," says Tilton, in an exclusive interview granted to USA Today. "Our economics will work."

FMI: www.ual.com