This is Bob Doughty with the VOA Special English EconomicsReport.

Bankruptcy is a process that, in some cases, can save a business.Companies that cannot pay their debts may go to bankruptcy court andseek protection from their creditors.

In December of two-thousand-two, United Airlines declaredbankruptcy. Since then, the carrier has continued to fly. And it hasreorganized. The aim is to come out of bankruptcy and be able tomeet financial responsibilities. United is the second-largestairline company in the world.

But last week the government rejected a request for help. Theparent company of United had asked the government to guarantee morethan a thousand million dollars in loans. That meant the governmentwould share responsibility if United could not repay the loans.

A special committee decided against the aid. The AirTransportation Stabilization Board has three members. They representthe central bank, the Treasury and the Transportation Department.Congress formed this board after the terrorist attacks of Septembereleventh, two-thousand-one. Air travel decreased after the attackswith hijacked planes.

Congress approved loan guarantees of up to ten-thousand-milliondollars to help the transportation industry recover. But the boardhas used only about fifteen percent of that. And the time limit torequest aid has passed.In all, United made three requests for loanguarantees. The first was for one-point-eight thousand milliondollars in June of two-thousand-two. The board denied the request inDecember of that year. It rejected the business plan that United hadproposed. But it gave United a second chance.

Then, in June, the board rejected a smaller request. It saidcredit markets have improved and guarantees were no longernecessary. Air travel has increased worldwide over the pastyear.Then, at the end of June, the board rejected a third and finalrequest from United.

United says it has cut about thirty-seven percent of its jobs. Itsays it has cut costs by nearly five-thousand-million dollars. Theairline is expected to ask for more pay cuts from its employees. Andit is expected to seek at least two-thousand-million dollars in newfinancing without government guarantees.

This VOA Special English Economics Report was written by MarioRitter. This is Bob Doughty.