United looks for exit financing CHICAGO (Reuters) =97 Bankrupt United Airlines Monday said it has started=20 preliminary talks to secure financing for its eventual exit from bankruptcy= =20 protection but so far the amount it may want is unknown. Potential options= =20 for money include using loan guarantees from the federal government or=20 private equity funds including possibly from banks, said sources familiar=20 with the matter. Jeff Green, a spokesman for United, confirmed to Reuters=20 that initial discussions about exit financing have begun. "We've had=20 conversations with (financial backers) on both the debt and equity sides,=20 but it's really been just that =97 conversations," Green said. Green said= how=20 much, if any, money United will seek is unclear at this point. The airline= =20 is on record saying it is considering both the fourth quarter of 2003 and=20 the first quarter of 2004 to emerge from court protection. "We're looking=20 at the fourth quarter, we're looking at the first quarter," he said. "We=20 haven't made any determination." The airline's board of directors is=20 meeting on Monday and will be discussing a business plan to become=20 financially viable, sources said. The plan is not the formal reorganization= =20 plan required by the court. It will also be presented to creditors'=20 committee on Wednesday. Business plan awaited Other than reducing costs, details of the business plan are not yet known.= =20 Green declined to comment on what it contains or when it will be released=20 publicly, including the possible launch of an low-cost, no frills airline=20 within an airline. Analysts and union sources have told Reuters that United's so-called=20 "Starfish" low-cost carrier endeavor has become less essential after the=20 airline won huge hourly pay cuts on Airbus A320s and Boeing 737s. Delta Air= =20 Lines has launched its own low-cost unit named Song, but its reach is very= =20 limited. United, the world's second largest airline, a unit of UAL Corp.,=20 filed for bankruptcy in December after failing to win backing from the=20 federal government for $1.8 billion in loans needed to make huge debt=20 pavements. It predicted an 18- to 24-month stay. Just prior to the=20 bankruptcy filing =97 which was the largest in U.S. aviation history, the= Air=20 Transportation Stabilization Board in Washington, D.C., said United's=20 business plan submitted in support of its loan application was flawed. Back to Uncle Sam? But the ATSB, an agency created to dole out up to $10 billion in loan=20 guarantees after the disastrous Sept. 11, 2001, attacks, also left the door= =20 open for United to return. The airline earlier this year won $2.5 billion=20 in annual labor concessions and has other cost cuts in place. A rival=20 airline, US Airways Group, filed for bankruptcy protection last August and= =20 emerged March 31, after the Retirement System of Alabama put up money and=20 unions gave big concessions. The ATSB backed an exit loan from Bank of=20 America. In United's case, $1.5 billion in bankruptcy loans called=20 debtor-in-possession financing came from Citigroup Inc., J.P. Morgan Chase= =20 and Co. Inc., CIT Group and Bank One Corp.. Sources said any of of those=20 institutions could also provide exit financing. In an unprecedented=20 financial crisis, the nation's major airlines continue to struggle to turn= =20 a profit and will not see positive year-over-year traffic figures until at= =20 least the end of the year, said J.P. Morgan analyst Jamie Baker. "The=20 airline environment is anticipated to be more hospitable than it was in=20 December, 2002," Baker said. "If and when United emerges, it will be under= =20 clearer but by no means sunny skies." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************