Small U.S. regional airlines line up for guarantees

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By Julie MacIntosh
NEW YORK, June 28 (Reuters) - Regional air carriers Aloha Airlines, World
Airways Inc. (WLDA) and Great Plains Airlines filed applications on Friday
for federal loan guarantees, just ahead of the deadline for requesting some
of the $10 billion in federal aid set aside for U.S. airlines after Sept.
11.

Applications for huge sums of guaranteed loans from United Airlines and US
Airways Group Inc (U) have drawn the spotlight during the past few weeks,
but a slew of smaller airlines have asked for aid as well.

"Credit to airlines is just not available right now," said Jack Knight,
president and chief executive officer of Tulsa, Oklahoma-based Great Plains
Airlines. "Getting financing is a huge challenge because of Sept. 11."



The total amount of guarantees requested by regional carriers -- just over
$130 million from Aloha, World and Great Plains combined -- is dwarfed by
the nearly $2 billion in federal backing requested by UAL Corp.'s (UAL)
United, and the $900 million in backing for a $1 billion loan US Airways
said it needs to stay afloat.

Frontier Airlines (FRNT), a larger regional carrier based in Denver, applied
Friday for a guarantee on 85 percent of a $70 million line of credit.

Aloha Airlines and its affiliate Island Air run inter-island flights within
the state of Hawaii and to some islands in the Central Pacific.

KRISPY KREME DOUGHNUTS AND SUBWAY SANDWICHES

The airline asked the federal Air Transportation Stabilization Board for a
$45 million loan, $40.5 million of which would be guaranteed.

A proposed $170 million merger between the Aloha air group and Hawaiian
Airlines (HA), which would have created a single inter-island carrier in
Hawaii, was killed off earlier this year.

Great Plains runs flights between six cities in the central and western
United states including Oklahoma City and Colorado Springs, and serves
Krispy Kreme doughnuts and Subway sandwiches on its flights.

The carrier asked for a $61.5 million loan guarantee, which it said it would
use to finance new planes. It currently has only two jets, but would use
guaranteed loans to buy 10 new planes.

Peachtree City, Georgia-based World Airways asked on Friday for $27 million
in backing for a $30 million loan. World Airways flies members of the U.S.
Armed Forces around the world and runs charter flights for cruise lines.

Approval of the carriers' applications is far from certain. Applications
from regional air carriers Frontier Flying Service and Vanguard Airlines
Inc. (VNGD) were rejected when the government said it was not convinced the
airlines could repay their loans.


©2002 Reuters Limited.

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